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.