Market Decline Worsens the Outlook for Public Plans

A new analysis of state and local public pension plans indicates that these retirement plans will end fiscal year 2020 with negative annual investment returns, reduced asset values, lower funded ratios and higher actuarial costs. Additionally, the research indicates that plan finances will continue to decline in the wake of the economic downturn.  These findings are contained in a new research brief from SLGE and the Boston College Center for Retirement Research.

The analysis indicates that on the whole, plans can endure and will maintain sufficient assets to pay benefits. However, some plans with extremely low funded ratios will face an increased risk of exhausting assets and high costs that are associated with pay-go funding.

This brief is part of ongoing research that tracks the fiscal health of public pensions across the US. This research relies on the Public Plans Database (PPD) to report on the funded status of public pensions.