CRR Brief: The Miracle of Funding by State and Local Pension Plans

Here's a topic, that we don't spend nearly enough time on this blog: the wonderful world of public pensions.

To partially rememdy this shortcoming, we highlight this Issue in Brief from The Center for Retirement Research at Boston College: "The Miracle of Funding by State and Local Pension Plans," which was co-authored by Alicia H. Munnell, Kelly Haverstick, Steven A. Sass, and Jean-Pierre Aubry.

Here are the key findings:

·    State and local pension plans, overall, are as well funded as private plans, with assets   covering nearly 90 percent of liabilities.
·    This outcome is striking, even “miraculous,” given that public plans:
·    tend to pay larger benefits;
·    use a more stringent funding yardstick; and
·    are not covered by any national legislation governing their funding status.
·    While most plans are reasonably well-funded, a number — mostly small plans —fall below acceptable levels. 

This full pdf of this brief is available here.

PS