Journal Article

COVID-19 Poses Risks for State and Local Public Pensions

Abstract: If the coronavirus pandemic leads to a protracted recession, public pension funding could weaken further in the years to come. During the 2001 and 2007–09 recessions, investment returns failed to reach pension plans’ longer-term assumed returns, and shortfalls in state and local government budgets led some employers to temporarily reduce contributions. If pension funding falls during the current crisis, state and local governments may choose to adjust plan structures as they did after the Great Recession.

Keywords: Pensions; Local goverment; Investments; State government; COVID-19;

JEL Classification: H75; H71;

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Bibliographic Information

Provider: Federal Reserve Bank of Kansas City

Part of Series: Economic Bulletin

Publication Date: 2020-08-19

Pages: 4