Well-Funded Municipal Pension Plans Share Common Traits

Tuesday, March 3, 2015

The Center for State and Local Government Excellence examined the public pension systems in four states that have a long tradition of being well-funded to determine what they have in common. The plans – Delaware Public Employees' Retirement System, Illinois Municipal Retirement Fund, Iowa Public Employees' Retirement System, and North Carolina Retirement Systems – have unique histories and legal frameworks, but they share several practices: a commitment to fund the annual required contribution in both good and bad financial times; conservative, realistic assumptions that are adjusted based on experience; and changes to benefit levels and contribution rates as needed. The funded ratio for the plans studied ranges from 87.6 to 99.8%.