US. Pension Worries Ease for States, Localities on Stimulus, Stocks
Public pensions performed better than anticipated during the pandemic, easing the financial strain on state and local governments sponsoring the plans, thanks in part to U.S. aid and stock market gains.
The massive federal stimulus has helped head off the dire revenue picture that many governments were facing early in the pandemic. At the same time, record stock market gains and past changes to public pension operations helped drive funded levels higher and push pension management down the list of concerns for state and local governments, at least for now, according to a report from Municipal Market Analytics.
As a result, aggregate funding levels for state and local pension funds increased to 74.7% from 72.8%, according to a June report from the Center for Retirement Research at Boston College. Without the aid, plans likely would’ve found themselves in a worse situation than after the 2008 recession. Now, they will likely have the money to make contributions both this year and next, MMA said.
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