The aggregate funded ratio improved from 73 to 75 percent from FY 2020 to 2021. At the same time, contribution rates rose from 21 to 22 percent of payrolls.
While initial expectations for public pensions were low due to COVID, financial markets rebounded and municipal tax revenues were quite resilient.
Yet one other COVID-related factor – cuts to the state and local workforce – impacted public pension finances in FY 2021.
These cuts had little impact on funded status and required contribution amounts, but they do explain the rise in contribution rates, which are expressed as a share of lower payrolls.
Author(s): Jean-Pierre Aubry, Kevin Wandrei
Publication Date: June 2021
Publication Site: Center for Retirement Research at Boston College