An Update on Locally-Administered Pension Plans

Alicia H. MunnellJean-Pierre AubryJosh Hurwitz Laura Quinby

SLP#18

The brief’s key findings are:

  • The funded status for local plans fell from 83 percent in 2006 to 77 percent in 2010, similar to the pattern for state plans.
  • Discounting liabilities at the riskless rate would reduce the funded status to the 50-percent range.
  • Local plans are more expensive than state plans, but they have done a better job of making their annual required contributions.
  • Pension payments by local governments are about 8 percent of their total budgets.
  • Strikingly, only 40 percent of local payments go to local plans; the other 60 percent go to state plans that cover local workers, primarily teachers.