Assess pension liabilities and implement a funding plan

Pension liabilities continue to be a source of concern for local governments, crowding out a city's ability to invest in services, infrastructure, and education. City leaders can assess their pension liabilities and consider reforming pension benefits, investment strategy, and other policies to mitigate risk.

ASSESSMENT

Some questions to guide your thinking

  • What is the city's authority to propose pension reforms?
  • What is the city's pension funded status?
  • Is the pension liability crowding out investment in other city functions?
Example
Renegotiating retirement benefits with voter approval in San José

Renegotiating retirement benefits with voter approval in San José

San Jose, CA

Reading

Understanding trends in public pension funding levels

Pew Charitable Trust 10 minutes

This article discusses how public pension funding levels from thirty-three US cities recovered after the fallout from the 2008 recession.

  • Cities with low-funded pension levels in 2009 continued to have low-funded levels into 2015.
  • These cities’ persistent fiscal distress demonstrates the challenge of restoring poorly-funded plans to fiscal health.
  • Cities with funding levels above 90 percent before 2008 recovered well after the recession.
Reading

Grasping the impact of the COVID-19 recession on public pension systems

Boston College Center for Retirement Research 15 minutes

This issue brief provides an update on public pension plan performance and COVID-19 market volatility.

  • The March 2020 stock market crash raised concerns about the liquidity needs of public pension funds.
  • Most public pension plans ended FY 2020 with investment returns that fell short of actuarial expectations.

Example

Renegotiating retirement benefits with voter approval in San José

San Jose, CA

Read more

Reading

Understanding trends in public pension funding levels

This article discusses how public pension funding levels from thirty-three US cities…

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Reading

Grasping the impact of the COVID-19 recession on public pension systems

This issue brief provides an update on public pension plan performance and COVID-19 …