WASHINGTON, June 18, 2015 /PRNewswire-USNewswire/ -- A new issue brief from the Center for State and Local Government Excellence, The Funding of State and Local Pensions: 2014-2018, finds that the funded status of public pensions has increased from 72 percent in 2013 to 74 percent in 2014. There are two reasons for the improvements, according to the analysis by Alicia H. Munnell and Jean-Pierre Aubry:
- Positive stock market performance for the last five years allows the low returns of 2009 to be replaced with a positive year in plans that smooth their market gains and losses over five years; and
- Higher payments of the required annual contribution by state and local governments, increasing to 88 percent in 2014 compared to 82 percent in 2013.
The analysis is based on the 150 largest state and local pension plans in publicplansdata.org. The authors project that plans will be over 80 percent funded by 2018 if the portfolio achieves its assumed rate of return, currently averaging 7.6 percent nominal. Should investment returns fall below that level, e.g., to 4.6 percent, then plan assets would level off at 77 percent in 2015.
Read the full brief at http://slge.org/publications/the-funding-of-state-and-local-pensions-2014-2018
Access all Center retirement research at http://slge.org/research/retirement
About the Center for State and Local Government Excellence
The Center for State and Local Government Excellence helps state and local governments become knowledgeable and competitive employers so they can attract and retain a talented and committed workforce. The Center identifies best practices and conducts research on competitive employment practices, workforce development, pensions, retiree health security, and financial planning. The Center also brings state and local leaders together with respected researchers and features the latest demographic data on the aging workforce, research studies, and news on health care, recruitment, and succession planning on its website, www.slge.org.
SOURCE Center for State and Local Government Excellence