The Funded Status of Local Pensions Inches Closer to States

Source: Jean-Pierre Aubry, Caroline V. Crawford and Alicia H. Munnell, Center for Retirement Research at Boston College, SLP#58, January 2018

The brief’s key findings are:
– Since 2001, the aggregate funded status of local pension plans has lagged behind that of state plans, but the gap has been closing recently for two reasons.
– First, local plans continue to receive more of their required contributions than state plans and are a bit more likely to use stringent funding methods.
-Second, in recent years, local plans have earned stronger investment returns than state plans, perhaps partly due to a lower allocation to alternative investments.
– Despite this progress, many local plans – like their state counterparts – still face significant funding challenges.

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