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Why don't some States and Localities pay their required pension contributions?

WASHINGTON, May 15 /PRNewswire-USNewswire/ -- The Center for State and Local Government Excellence has issued its seventh issue brief on retirement plans, Why Don't Some States and Localities Pay Their Required Pension Contributions?

The brief, which was written by Alicia H. Munnell, Kelly Haverstick, Jean-Pierre Aubry, and Alex Golub-Sass of the Center for Retirement Research at Boston College, finds that:

  -- Over 40 percent of plans in our sample failed to make their annual

     required contribution (ARC) in 2006.

-- The majority of these plans faced legal constraints on their

     contributions, but many are gradually adjusting their limits.

  -- For the unconstrained plans, the following factors are associated with

     a failure to make the ARC:

     -- Degree of funding discipline -- the plan uses a less rigorous cost

        method;

     -- Size and type of plan -- the plan is large and is run by the state;

        and

     -- Fiscal health -- the plan is in a state with a relatively high debt

        burden.