Industry News

On January 14, 2026, the National Association of State Retirement Administrators (NASRA) updated its issue brief, State and Local Government Contributions to Statewide Pension Plans: FY 24. The brief includes: 1) a brief history of public pension contributions; 2) recent public employer contribution experience; and 3) how governance structure may impact funding experience.    

The brief indicates that, “According to the U.S. Census Bureau, on a national basis, contributions made by employers – states and local governments – in 2024 accounted for 76 percent of all contributions received by public pension plans…. [Of] the $10+ trillion in public pension revenue received during the 30-year period since 1995, 41 percent, or more than $4.3 trillion, came from contributions paid by employers and employees.” 

On average, employer contributions to public pension plans continue to be a small percentage of state and local government spending. In recent years, employer contributions have been growing. Among the statewide pension plans included in the study, the aggregate public employer contributions increased from $163 billion in Fiscal Year (FY) 23 to $168 billion in FY 24, up 3.2 percent. This marks the lowest rate of year-over-year growth since FY 16. In FY 22 and FY 23, the employer contribution rate grew by 7.2% and 11.8%, respectively. The lower rate of growth in FY 24 also reflects that the change in the Actuarially Determined Contribution (ADC) was lower from FY 23 to FY 24 than in more recent years. 

The brief notes that Actuarial Standard of Practice (ASOP) No. 4 defines an ADC as, “A potential payment to the plan as determined by the actuary using a contribution allocation procedure. It may or may not be the amount actually paid by the plan sponsor or other contributing entity.” 

According to NASRA, “the median percentage of ADC received in FY 24 was again 100 percent. The dollar-weighted average was down slightly from FY 23, but at 102 percent, remained above 100 percent for the third consecutive year and the fifth consecutive year in which the aggregate ADC experience was above 98 percent.”

Furthermore, NASRA cited that, “Following the recession of 2007-09 and the market decline of 2008-09, many public pension plans changed their funding policies and practices, resulting in increases in required contributions. Many of these changes also included implementation of more aggressive funding policies; lower investment return assumptions; updated mortality assumptions; and reduced amortization periods.”   

The brief concludes, “Overall, as a group, public pension plans in recent years have received significantly higher contributions, measured both in dollars and as a percentage of their actuarially determined amount.”

For the individual plans included in the analysis, the brief also provides an appendix with the basis of employer contributions and contribution history for FY 15 to FY 24.     

The brief is available here.