State and local pension systems have received significant attention in the last few years. Changes to state pension systems have been taking place in response to the increased attention and concerns.  This brief examines a number of pension issues from a budgetary perspective. A budgetary perspective considers long term pension funding adequacy, and the financial cost of promised benefits in relation to the rest of current state spending. Sufficiently budgeting for public pension systems can help states resolve pension funding issues over time without disrupting current appropriations for public services. Pension contributions currently represent a small percentage of states’ operating budgets, but pension funding requirements may comprise a greater share of spending in the future, as public sector employee demographics change and new pension fund accounting rules gain traction.

A State Budgeting Perspective on Public Pensions