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Public Plans Database Finds State and Local Pension Plans’ Average Funded Ratio Remains Steady

On September 23, 2021, the MissionSquare Research Institute (formerly the Center for State and Local Government Excellence at ICMA-RC or SLGE) released its research study, Public Plans Database – Snapshot as of September 2021. The analysis indicates that the average funded ratio among state and local pension plans included in the Public Plans Database (PPD) has remained 72% despite the early economic disruption of the COVID-19 pandemic. In addition, those plans have accumulated total assets in defined benefit (DB) pension plans of $5 trillion and in defined contribution (DC) plans of $531 billion.

Other key findings include:

  • DB pensions are offered to 86% of state and local government employees while DC plans are offered to 37%.
  • In 2020, 83% of public pension plans have been contributing at or near their full actuarially determined employer contribution (ADEC), down from 85% in 2019.
  • Of the 207 plans for which 2020 investment data are available, the average assumed return was 7.1%, which was slightly lower than in 2019, but the average actual returns in 2020 were also lower at 3.6%.
  • In 2001, high ratios of active participants to beneficiaries were common, especially for smaller or medium-sized plans. In 2019, all plans averaged 1 to 1.5 active participants for each beneficiary, which may be due to the aging of the workforce and maturing of newer plans.

The PPD is a comprehensive database of over 200 large state and local DB pension plans developed and maintained through the collaborative efforts of MissionSquare Research Institute, the Center for Retirement Research at Boston College (CRR), the Government Finance Officers Association (GFOA), and the National Association of State Retirement Administrators (NASRA).

The analysis is available here.