Amid COVID-19 Pandemic, Local Government Pension Plans’ Funded Ratios Hold Steady in Fiscal Year 2020
A new analysis of local public pension plans indicates that despite the ongoing COVID-19 pandemic and economic downturn, local government pension plans will see virtually no change in their average funded ratio during fiscal year 2020. Moreover, projections indicate that local pensions are quite sustainable on a cash-flow basis, and most can pay benefits indefinitely at their current contribution levels.
However, strains on government finances due to the COVID-19 recession could make it harder for localities to pay their required pension contributions. Projections through 2025 suggest that the finances for all public plans will deteriorate further, with local plans slightly worse off than state plans.