The Funding of State and Local Pensions: 2009-2013

Alicia H. MunnellJean-Pierre Aubry Laura Quinby

SLP#10

The brief’s key findings are:

  • State and local plans, which were headed toward full funding, were knocked off track by the financial crisis.
  • Their funding ratio dropped from 84 percent in 2008 to an estimated 78 percent in 2009.
  • Funding will likely continue to decline to 72 percent by 2013.
  • Reversing this decline will be difficult, as plans face constraints in increasing revenues from either employee contributions or taxes.