State and local municipal pension plans are generally funded as well as private plans, despite the lack of federal legislation governing their funding status, according to a new issue brief by the Center for Retirement Research at Boston College. Between 2003 and 2006, funding levels averaged about 88% for the public sector and 86% for the private sector, according to the brief, The Miracle of Funding by State and Local Pension Plans. The result is surprising because public plans tend to pay larger benefits, use a more stringent funding yardstick and are not covered by ERISA, the brief said. Smaller public plans had more instances of underfunding, CRR said. It did not give more specifics.
The full brief is available at http://crr.bc.edu/images/stories/Briefs/slp_5.pdf.