Overview
According to the U.S. Census Bureau, over 5,000 public sector retirement systems exist in the U.S. Some of the roughly 300 state-administered plans and 5,000 locally-administered plans date back to the 19th century and each has evolved independently. Collectively, these plans have:
- $5.6 trillion in assets
- 15.0 million active (working) members and 11.7 million retirees
- $340 billion in benefit distributions annually
Most public pension plans release financial reports with information on pension trust cash flows and plan membership as well as actuarial data on plan assets, liabilities, and annual costs. These financial reports are prepared in compliance with the accounting standards set by the Governmental Accounting Standards Board (GASB) and can be found on most plans’ websites. Significant differences exist among plans: the benefit design of their plans, manner in which plans are funded, membership composition, and investment policy. This quick-fact page highlights the aggregate status of public pension plans across the nation, as reported in their own financial documents.
Assets, Participants and Benefits
State and local government pension benefits are paid from trust funds to which public employees and their employers contributed while they were working, not from general operating revenues. Trust fund assets are invested and grow over time. The combined value of defined benefit plan assets held by state and local governments as of Q2 2021 increased to $5.7 trillion, from $4.5 trillion as of Q2 2020 (Federal Reserve Flow of Funds, March 2023). PPD data covers the period from 2001 to the most recently available plan reports, and the historical charts presented in this page mirror the period for which PPD data are available.
State and Local Defined Benefit Plan Assets Year-End, 1992- (Trillions)
Fiscal Year |
PPD |
Flow of Funds |
1992 |
null |
0.9 |
1993 |
null |
1.0 |
1994 |
null |
1.1 |
1995 |
null |
1.2 |
1996 |
null |
1.4 |
1997 |
null |
1.7 |
1998 |
null |
2.0 |
1999 |
null |
2.2 |
2000 |
null |
2.4 |
2001 |
2.1 |
2.3 |
2002 |
1.9 |
2.2 |
2003 |
2.0 |
2.2 |
2004 |
2.3 |
2.5 |
2005 |
2.4 |
2.7 |
2006 |
2.7 |
2.9 |
2007 |
3.0 |
3.3 |
2008 |
2.7 |
3.1 |
2009 |
2.2 |
2.4 |
2010 |
2.5 |
2.7 |
2011 |
2.8 |
3.1 |
2012 |
2.8 |
3.0 |
2013 |
3.1 |
3.3 |
2014 |
3.4 |
3.7 |
2015 |
3.4 |
3.8 |
2016 |
3.4 |
3.7 |
2017 |
3.7 |
4.0 |
2018 |
3.9 |
4.3 |
2019 |
4.1 |
4.4 |
2020 |
4.2 |
4.5 |
2021 |
5.1 |
5.7 |
State and local employees make up 13.8 percent of the US workforce.  And about 25 percent of state and local employees are not covered by Social Security, including nearly half of all teachers and over two-thirds of firefighters and public safety officers.
Number of Actives per Annuitant, 1992-
Fiscal Year |
PPD |
Census |
1992 |
null |
2.5 |
1993 |
null |
2.6 |
1994 |
null |
2.5 |
1995 |
null |
2.5 |
1996 |
null |
2.5 |
1997 |
null |
2.5 |
1998 |
null |
2.4 |
1999 |
null |
2.4 |
2000 |
null |
2.2 |
2001 |
2.4 |
2.3 |
2002 |
2.3 |
2.3 |
2003 |
2.2 |
2.2 |
2004 |
2.1 |
2.1 |
2005 |
2.1 |
1.8 |
2006 |
2.0 |
2.0 |
2007 |
2.0 |
1.9 |
2008 |
1.9 |
1.9 |
2009 |
1.9 |
1.9 |
2010 |
1.8 |
1.8 |
2011 |
1.7 |
1.7 |
2012 |
1.6 |
1.6 |
2013 |
1.5 |
1.5 |
2014 |
1.4 |
1.5 |
2015 |
1.4 |
1.5 |
2016 |
1.4 |
1.4 |
2017 |
1.4 |
1.4 |
2018 |
1.3 |
1.3 |
2019 |
1.3 |
1.3 |
2020 |
1.3 |
1.3 |
2021 |
1.2 |
1.3 |
2021 Membership in Millions
Costs
Funding commitment – the degree to which the plan sponsor regularly and fully makes required contributions to the plan – is a critical factor in assessing the current and future health of a pension plan and an indicator as to whether or not the costs of funding the pension plan creates fiscal stress for the pension plan sponsor.
The employer’s required contribution each year is generally equal to the amount needed to finance benefits earned in the current year, plus an amount to amortize unfunded benefits earned in past years, net of contributions made by employees. In practice, there are various methods used by plans for calculating costs of benefits earned in the current year and amortizing the cost of unfunded benefits.  Additionally, plans vary in their assumptions for key parameters underlying the calculation of the required contribution such as the assumed long-term investment return, the assumed growth of salaries for individual employees as well as the overall plan payroll, and the assumed mortality. Because these methods and assumptions can differ from one plan another, caution should be taken when comparing the required contribution between plans.
Employer's Annual Required Contribution as a Percent of Payroll and Portion Paid, 2001-
Fiscal Year |
Portion of ARC paid |
Portion of ARC left unpaid |
Percent of Payroll |
{role:annotation} |
2001 |
6.6 |
0.1 |
6.7 |
6.7 |
2002 |
6.3 |
0.4 |
6.7 |
6.7 |
2003 |
6.9 |
0.8 |
7.8 |
7.8 |
2004 |
8.3 |
1.3 |
9.6 |
9.6 |
2005 |
9.7 |
1.5 |
11.2 |
11.2 |
2006 |
10.0 |
1.7 |
11.7 |
11.7 |
2007 |
10.9 |
1.5 |
12.4 |
12.4 |
2008 |
11.7 |
0.9 |
12.6 |
12.6 |
2009 |
11.2 |
1.7 |
12.8 |
12.8 |
2010 |
11.6 |
2.6 |
14.2 |
14.2 |
2011 |
13.0 |
2.9 |
15.9 |
15.9 |
2012 |
13.8 |
3.2 |
17.0 |
17.0 |
2013 |
14.9 |
3.2 |
18.2 |
18.2 |
2014 |
16.1 |
2.3 |
18.4 |
18.4 |
2015 |
17.3 |
1.5 |
18.8 |
18.8 |
2016 |
17.3 |
1.5 |
18.8 |
18.8 |
2017 |
17.9 |
1.1 |
19.1 |
19.1 |
2018 |
19.6 |
1.2 |
20.9 |
20.9 |
2019 |
19.6 |
1.1 |
20.7 |
20.7 |
2020 |
20.6 |
0.9 |
21.5 |
21.5 |
2021 |
20.9 |
0.8 |
21.7 |
21.7 |
2022 |
21.3 |
0.7 |
22.0 |
22.0 |
Employer's Annual Required Contribution as a Percent of Payroll and Own-Source Revenue, 2001-
Fiscal Year |
ARC as % of payroll |
ARC as % of revenue |
2001 |
6.7 |
2.4 |
2002 |
6.7 |
2.5 |
2003 |
7.8 |
2.9 |
2004 |
9.6 |
3.5 |
2005 |
11.2 |
3.9 |
2006 |
11.7 |
3.9 |
2007 |
12.4 |
4.0 |
2008 |
12.6 |
4.1 |
2009 |
12.8 |
4.4 |
2010 |
14.2 |
5.0 |
2011 |
15.9 |
5.3 |
2012 |
17.0 |
5.5 |
2013 |
18.2 |
5.6 |
2014 |
18.4 |
5.7 |
2015 |
18.8 |
5.7 |
2016 |
18.8 |
5.7 |
2017 |
19.1 |
5.7 |
2018 |
20.9 |
6.0 |
2019 |
20.7 |
5.9 |
2020 |
21.5 |
6.3 |
2021 |
21.7 |
6.4 |
2022 |
22.0 |
null |
Actuarial Funding
While funded ratios among pension plans vary substantially, in the aggregate, public pension funding levels rose steadily during the 1990s, due largely to strong returns in global equity markets. Since then, sharp market downturns in 2000-02 and 2008-09 negatively affected asset values and increased unfunded pension liabilities and required contributions. A combination of the market downturns, insufficient contributions (for some plans), and increased benefit levels (also for some plans) resulted in a decline in aggregate funding level between 2001 and 2012, and has since remained relatively stable.
Below is a summary of aggregate funding levels from 2001Â through 2018:
Actuarial Funded Ratio for State and Local Pensions, 2001-
Fiscal Year |
Percent |
2001 |
101.7 |
2002 |
95.2 |
2003 |
89.0 |
2004 |
87.2 |
2005 |
85.4 |
2006 |
85.3 |
2007 |
86.3 |
2008 |
84.4 |
2009 |
78.4 |
2010 |
75.7 |
2011 |
74.3 |
2012 |
72.3 |
2013 |
71.9 |
2014 |
73.2 |
2015 |
73.2 |
2016 |
71.6 |
2017 |
72.1 |
2018 |
72.4 |
2019 |
72.5 |
2020 |
72.7 |
2021 |
75.7 |
2022 |
76.0 |
Investments
Pension benefits for public employees are pre-funded. In other words, employers and employees make contributions to the pension during an employee’s working life, which are invested and then distributed over the participant’s years in retirement.
Public pension funds are invested in broadly diversified portfolios for the purpose of generating investment earnings with an acceptable level of risk.  Public pensions develop target asset allocations considering a broad range of factors, including the fund’s risk tolerance, projected stream of benefits payments, expected contributions, and the efficient frontier, which optimizes levels of risk and return. The long-term nature of public pension fund investment goals permits investors to focus on long-term results, within the context of the level of risk the fund incurs.
Asset Allocation for State and Local Pensions, 2022
Category |
Percent |
Equities |
42.7 |
Fixed Income |
20.8 |
Private Equity |
13.0 |
Real Estate |
10.2 |
Cash |
2.1 |
Other |
0.6 |
Commodities |
2.3 |
Hedge Fund |
6.5 |
Misc. Alternatives |
1.8 |
Asset Allocation, 2022
Asset allocation for State and Local Pensions, 2001-
Fiscal Year |
Equities |
Fixed Income |
Private Equity |
Real Estate |
Cash |
Other |
Commodities |
Hedge Fund |
Misc. Alternatives |
2001 |
57.8 |
31.4 |
3.7 |
4.6 |
1.8 |
0.1 |
0.0 |
0.3 |
0.4 |
2002 |
56.8 |
32.6 |
3.7 |
4.7 |
1.6 |
0.0 |
0.1 |
0.1 |
0.4 |
2003 |
58.7 |
30.4 |
3.7 |
4.5 |
1.9 |
0.1 |
0.2 |
0.2 |
0.4 |
2004 |
62.0 |
27.6 |
3.6 |
4.3 |
1.6 |
0.0 |
0.2 |
0.3 |
0.4 |
2005 |
61.4 |
27.9 |
3.8 |
4.4 |
1.4 |
0.0 |
0.2 |
0.5 |
0.4 |
2006 |
61.6 |
26.5 |
4.1 |
5.0 |
1.6 |
0.0 |
0.2 |
0.5 |
0.5 |
2007 |
59.9 |
25.9 |
4.8 |
5.5 |
1.7 |
0.0 |
0.2 |
1.3 |
0.6 |
2008 |
54.1 |
27.4 |
6.6 |
6.8 |
1.6 |
0.0 |
0.6 |
2.0 |
0.8 |
2009 |
50.4 |
29.0 |
7.4 |
6.2 |
2.5 |
0.0 |
0.7 |
2.8 |
0.8 |
2010 |
50.8 |
27.9 |
8.2 |
5.9 |
2.0 |
0.0 |
0.8 |
3.3 |
1.0 |
2011 |
51.8 |
24.6 |
8.6 |
6.7 |
2.3 |
0.1 |
1.1 |
3.7 |
1.0 |
2012 |
49.6 |
24.6 |
9.2 |
7.9 |
2.0 |
0.1 |
1.1 |
4.5 |
1.1 |
2013 |
51.0 |
22.5 |
8.7 |
7.8 |
2.2 |
0.1 |
1.1 |
5.4 |
1.1 |
2014 |
51.5 |
21.5 |
8.5 |
7.6 |
2.2 |
0.1 |
1.3 |
6.4 |
1.0 |
2015 |
50.1 |
22.1 |
8.4 |
8.1 |
1.9 |
0.2 |
1.4 |
6.8 |
1.0 |
2016 |
48.5 |
22.8 |
8.5 |
8.8 |
1.7 |
0.2 |
1.5 |
6.9 |
1.1 |
2017 |
49.5 |
21.8 |
8.4 |
8.3 |
2.0 |
0.2 |
1.6 |
7.0 |
1.1 |
2018 |
48.1 |
22.5 |
8.9 |
8.4 |
1.8 |
0.2 |
1.8 |
7.1 |
1.2 |
2019 |
47.0 |
23.3 |
9.1 |
8.7 |
1.8 |
0.1 |
1.9 |
6.8 |
1.3 |
2020 |
46.4 |
23.6 |
9.4 |
8.7 |
2.2 |
0.1 |
1.8 |
6.4 |
1.3 |
2021 |
47.1 |
21.6 |
11.3 |
8.0 |
2.1 |
0.6 |
1.9 |
5.8 |
1.6 |
2022 |
42.7 |
20.8 |
13.0 |
10.2 |
2.1 |
0.6 |
2.3 |
6.5 |
1.8 |
Annual Return for State and Local Pensions, 1992-
Fiscal Year |
Annual Return |
Assumed Return |
1992 |
10.17 |
8.22 |
1993 |
5.01 |
8.21 |
1994 |
10.88 |
8.20 |
1995 |
11.31 |
8.17 |
1996 |
14.54 |
8.15 |
1997 |
16.76 |
8.15 |
1998 |
17.45 |
8.15 |
1999 |
12.13 |
8.11 |
2000 |
15.50 |
8.07 |
2001 |
1.34 |
8.04 |
2002 |
2.22 |
8.02 |
2003 |
3.14 |
7.98 |
2004 |
17.18 |
7.94 |
2005 |
9.48 |
7.93 |
2006 |
11.20 |
7.92 |
2007 |
15.71 |
7.92 |
2008 |
-3.47 |
7.90 |
2009 |
-20.90 |
7.88 |
2010 |
14.11 |
7.80 |
2011 |
17.64 |
7.69 |
2012 |
2.98 |
7.65 |
2013 |
10.71 |
7.64 |
2014 |
15.83 |
7.62 |
2015 |
5.54 |
7.57 |
2016 |
0.69 |
7.49 |
2017 |
10.67 |
7.39 |
2018 |
10.18 |
7.24 |
2019 |
4.15 |
7.18 |
2020 |
4.58 |
7.13 |
2021 |
26.26 |
7.01 |
Investment Return for State and Local Pensions
Rolling 30-year Investment Return for State and Local Pensions, 1992-
Fiscal Year |
30-yr return |
Assumed Return |
1992 |
7.10 |
8.22 |
1993 |
7.16 |
8.21 |
1994 |
7.42 |
8.20 |
1995 |
7.66 |
8.17 |
1996 |
8.02 |
8.15 |
1997 |
8.42 |
8.15 |
1998 |
8.88 |
8.15 |
1999 |
9.14 |
8.11 |
2000 |
9.50 |
8.07 |
2001 |
9.40 |
8.04 |
2002 |
9.32 |
8.02 |
2003 |
9.20 |
7.98 |
2004 |
9.62 |
7.94 |
2005 |
9.77 |
7.93 |
2006 |
9.93 |
7.92 |
2007 |
10.35 |
7.92 |
2008 |
9.93 |
7.90 |
2009 |
8.83 |
7.88 |
2010 |
9.03 |
7.80 |
2011 |
9.37 |
7.69 |
2012 |
9.11 |
7.65 |
2013 |
9.05 |
7.64 |
2014 |
9.31 |
7.62 |
2015 |
9.12 |
7.57 |
2016 |
8.69 |
7.49 |
2017 |
8.57 |
7.39 |
2018 |
8.65 |
7.24 |
2019 |
8.45 |
7.18 |
2020 |
8.16 |
7.13 |
2021 |
8.74 |
7.01 |
Cash Flows
Cash Flow vs. Total Assets (Billions)
2001-
Fiscal Year |
Cash Flow |
Assets |
2001 |
-43.4 |
2,108.6 |
2002 |
-46.8 |
1,929.9 |
2003 |
-51.0 |
1,991.3 |
2004 |
-45.2 |
2,255.4 |
2005 |
-53.0 |
2,437.6 |
2006 |
-59.5 |
2,659.4 |
2007 |
-63.2 |
3,030.3 |
2008 |
-64.0 |
2,743.4 |
2009 |
-70.1 |
2,243.9 |
2010 |
-79.0 |
2,474.4 |
2011 |
-87.2 |
2,810.4 |
2012 |
-91.8 |
2,818.5 |
2013 |
-96.7 |
3,071.2 |
2014 |
-98.7 |
3,437.4 |
2015 |
-96.3 |
3,438.3 |
2016 |
-102.8 |
3,408.4 |
2017 |
-107.0 |
3,738.3 |
2018 |
-101.9 |
3,897.5 |
2019 |
-105.5 |
4,090.9 |
2020 |
-101.5 |
4,170.3 |
2021 |
-108.8 |
5,118.3 |
2022 |
-98.3 |
4,760.0 |
2022 Cash Flows (billions)
Inflows |
Outflows |
Investment Gains (losses) |
Change in Net Assets |
255.4 |
353.8 |
-260.0 |
-358.4 |
Cash Flow as a Percentage of Assets
2001-
Fiscal Year |
National Average |
2001 |
-2.1 |
2002 |
-2.4 |
2003 |
-2.6 |
2004 |
-2.0 |
2005 |
-2.2 |
2006 |
-2.2 |
2007 |
-2.1 |
2008 |
-2.3 |
2009 |
-3.1 |
2010 |
-3.2 |
2011 |
-3.1 |
2012 |
-3.3 |
2013 |
-3.2 |
2014 |
-2.9 |
2015 |
-2.8 |
2016 |
-3.0 |
2017 |
-2.9 |
2018 |
-2.6 |
2019 |
-2.6 |
2020 |
-2.4 |
2021 |
-2.1 |
2022 |
-2.1 |
Interactive Chart
Social Security Coverage of State and Local Employees, by State
This website uses cookies to improve your experience. We also use IP addresses, domain information and other access statistics to administer the site and analyze usage trends. If you prefer to opt out, you can select Update settings. Read our Privacy Policy. Accept Privacy & Cookies Policy