The Impact of Public Pensions on State and Local Budgets

Alicia H. MunnellJean-Pierre Aubry Laura Quinby

SLP#13

The brief’s key findings are:

  • Currently, state and local pension contributions equal 3.8 percent of total budgets.
  • To get back on a path to full funding, sponsors will need to contribute:
    • 5.0 percent of budgets if liabilities are discounted by 8 percent; or
    • 9.1 percent of budgets if liabilities are discounted at 5 percent.
  • But states with seriously underfunded plans and/or generous benefits – like CA, IL, and NJ – will need to contribute significantly more.