The Funding Status of Locally Administered Pension Plans
SLP#8
Introduction
Are big city pensions and other locally administered pension plans in trouble? While state-administered plans are about as well funded as private sector plans, stories circulate about the perils facing Philadelphia, Omaha, Atlanta, and other cities. To answer the question about locally administered pensions, we collected data on 84 plans from 38 states. This brief describes the results of that survey, reporting the funding status of these locally administered plans and the extent to which their sponsors have a funding strategy and are sticking to it.
The first section describes the sample. The second section compares the funding status of local plans to that of state plans. The third section reports on the factors that affect the level of funding among localities. The fourth section concludes.
The main finding is that the sample of locally administered plans, which includes plans from the problem cities previously cited, has funding strategies that are as good as or better than state plans.
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Alicia H. Munnell is the Peter F. Drucker Professor of Management Sciences in Boston College’s Carroll School of Management and Director of the Center for Retirement Research at Boston College (CRR). Jean-Pierre Aubry is a research associate at the CRR. Kelly Haverstick is a research economist at the CRR. The authors would like to thank Beth Almeida, Katherine Barrett, Ed Macdonald, Steven Sass, and Michael Travaglini for helpful comments.