Administration July 5, 2011
Local Government Plan Funded Status Declined
July 5, 2011 (PLANSPONSOR.com) – An update from the Center for Retirement Research at Boston College indicates that the funded status for local government pension plans fell from 83% in 2006 to 77% in 2010.
Reported by Rebecca Moore
Discounting liabilities at the riskless rate would reduce the funded status to the 50% range, according to the CRR’s Issue Brief.
The survey also found that local plans are more expensive than state plans, but they have done a better job of making their annual required contributions. Pension payments by local governments are about 8% of their total budgets.
Only 40% of local payments go to local plans; the other 60% go to state plans that cover local workers, primarily teachers.
The study included 97 locally-administered plans from 40 states.
The Issue Brief can be downloaded from http://crr.bc.edu/briefs/an_update_on_locally-administered_pension_plans.html.