Queen Creek's Pension Problem: How One Town Changed the Pension Conversation in Arizona

Pension costs are a challenge for local governments all over the country. When looking across the United States, the actuarial funded ratio for public pension plans dropped from around 90% at the beginning of the century to just over 70% in 2012. It has remained at about this level since.i The effect of this sustained underfunding of pension liabilities is that local governments’ contributions to pension plans, both as a percent of payroll and total revenue, have been steadily increasing: rising to 17.4% and 3.2%, respectively, as of 2018.

This pension underfunding problem represents a collective action problem of the kind addressed by GFOA’s Financial Foundations for Thriving Communities

• Publication date: February 2020
• Author: Shayne Kavanagh