The Impact of Public Pensions on State and Local Budgets

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.