This report examines several innovative and often lesser-known pension funding strategies that have been utilized in the public sector to address legacy pension costs and to create more stable costs over time. It comes as the recession sparked by the COVID-19 pandemic has threatened many state and local government budgets, and as concerns mount that cash-strapped governments will cut back on funding required contributions to public pension plans.

Beyond the ARC: Innovative Funding Strategies from the Public Sector offers a collection of funding strategies that run the gamut – from implementing a wholesale funding strategy for a large state-wide plan to more targeted reforms that simply give participating employers more control of how costs are paid over time.

These innovative strategies extend well beyond the oft-cited paying the Annual Required Contributions (ARC) or Actuarially Determined Employer Contribution (ADEC). Each of these efforts changes the nature of plan funding in different ways, and these case studies can be a useful reference guide for those who are concerned about a well-functioning public finance system and honoring benefits earned by state and local government employees.