Strategies for Well-Funded Pension Plans

Source: Elizabeth Kellar, Government Finance Review, Vol. 31 no. 3, June 2015

The funded status of public pensions remains a hot topic, yet the pension plans that are well funded get little attention. State and local pension plans hold an aggregate of $3.77 trillion in assets and have 14.4 million active members and 9 million retirees. Public employees and employers contribute to pensions during an employee’s working years. Why is it, then, that some pension plans are better funded than others? The Center for State and Local Government Excellence examined four defined benefit pension systems that have a long tradition of being well funded: the Delaware Public Employees’ Retirement System, Illinois Municipal Retirement Fund, Iowa Public Employees’ Retirement System, and North Carolina Retirement Systems. The study found certain characteristics common to all of these well-funded plans…..