Industry News

On January 4, 2022, the National Conference on Public Employee Retirement Systems (NCPERS) released its report, Enhancing Sustainability of Public Pensions. The study examines the sustainability valuation to monitor pension plan fiscal conditions. NCPERS indicates that, “The more sustainable pension plans are, the better funded they are. Similarly, the sustainable pension plans have lower contribution rates.”

According to the report, “Based on the latest data (2018), … unfunded liabilities of the state and local pension plans in the United States can be stabilized and made fiscally sustainable by paying them down by about $141 billion or 0.8 percent of the economy. The $141 billion was about 3 percent of unfunded liabilities in 2018.” It adds, “[S]tate and local governments may not have the needed amounts readily available to pay down unfunded liabilities right away. However, they can use stabilization funds to stabilize unfunded liabilities in, say, the next five years and then use the sustainability valuation approach to keep them stable and fiscally sustainable going forward.”  

The report also provides a state-by-state analysis of the sustainability of outstanding debt and unfunded pension liabilities from 2004 to 2018.

The report is available here.