Success Strategies for Well-Funded Pension Plans

by

SLGE#0215

The Center for State and Local Government Excellence examined the public pension systems in four states with a long tradition of being well-funded to determine what they have in common.  The plans studied are: Delaware Public Employees’ Retirement System, Illinois Municipal Retirement Fund, Iowa Public Employees’ Retirement System, and North Carolina Retirement Systems.

While each of the defined benefit plans has a unique history and legal framework, they share these practices:

  • a commitment to fund the annual required contribution in both good and bad financial times;
  • conservative, realistic assumptions that are adjusted based on experience; and
  • changes to benefit levels and contribution rates as needed.

The funded ratio for the plans studied ranges from 87.6 percent to 99.8 percent.