The Status of Local Government Pension Plans in the Midst of COVID-19

The brief’s key findings are:

• Despite the recent market recovery, during fiscal year 2020, local government pension plans will see virtually no change in their average funded ratio.
• And, going forward, the strains on government finances due to the recession could make it harder for localities to pay their required pension contributions.
• But projections show that local plans are quite sustainable on a cash-flow basis. Most can pay benefits indefinitely at their current contribution levels.
• The only exceptions are the very worst-funded plans, which face the real risk of exhausting their assets.