Charted: Local Police/Fire Plans Are Not Systematically Worse Funded Than Teacher Systems

The instinct on many budget desks is that locally run police and fire pensions are the soft underbelly of public retirement finance — smaller sponsors, political pressure to keep contribution rates low, and benefit formulas that retire members earlier than teacher or general-employee plans. Equable Institute’s State of Pensions type splits, read beside a desk sample of large plans with disclosed funded ratios, say something sharper and less convenient: municipal public-safety systems are not systematically worse funded than standalone teacher systems on a liability-weighted basis, and they look materially better than state-employee-only plans. The drama is in the distribution, not in a simple “local P&F always loses” ranking.

The dashboard above is built for that double read. Toggle Weighted gaps for Equable’s FY 2023–2024 type averages versus teachers; Median ladder for equal-weight sample medians; Funded bins and Funded × size for left-tail and liability-scale risk; Type path for the two-year move. Filter the sample by public safety, municipal P&F only, teachers, or state employees.

Scoreboard: weighted averages vs sample medians

Two numbers that look like they disagree are both true. On Equable’s liability-weighted averages — the right tool for “how funded is this type of promise in the aggregate?” — municipal public safety and teachers sit within a few tenths of a point. On an equal-weight median of large disclosed plans — the right tool for “what does a typical large plan in each cohort look like?” — public safety’s median is about thirty points higher than the teacher median in this sample. Dollar risk still lives mostly in teacher systems because their liability base is enormous.

The core question, answered carefully

Are local public-safety plans systematically worse funded than state teacher and employee plans? Against teachers, no — not on Equable’s FY 2024 weighted averages, and not on the sample median. Against state-employee-only systems, local public safety looks better by roughly eleven percentage points on the weighted measure (76.7% vs 65.7%). Against statewide public-safety plans, local P&F trails (76.7% vs 82.1%) — so the local administration margin is real within the public-safety family, even when the teacher comparison is flat.

That nuance matters because “local” and “public safety” are often collapsed into one scare category. Census and CRR work have long noted that police/fire plans are a much larger share of the local plan universe than of the state plan universe, while teachers dominate state systems. Comparing “local plans” to “state plans” without slicing by employee type mixes apples and hydrants. The Equable type table is the cleaner cut.

Why the weighted gap is so small

Equable’s FY 2024 teacher cohort carries $578.8 billion of unfunded liability across 51 plans at 76.4% funded. Municipal public safety carries $43.9 billion across 22 plans at 76.7%. Statewide public safety sits at 82.1% with $55.7 billion unfunded. The teacher bucket is simply larger: a few poorly funded mega-systems (Illinois Teachers, New Jersey TPAF, Chicago Teachers, and peers) pull the weighted average down even when many mid-sized teacher plans look healthier.

Public-safety systems enter that comparison with a different cost structure. CRR’s police-and-fire primer documents earlier retirement ages, higher normal costs, and more frequent Social Security noncoverage — all of which raise the contribution burden on cities and special districts. Higher cost does not automatically mean worse funded ratio. Sponsors that actually pay the actuarially determined contribution can keep a high-cost plan well funded; sponsors that chronically underpay can wreck a cheaper plan. Equable’s type averages say the large municipal P&F cohort, as a group, has kept pace with teacher funding even while paying for a richer benefit design.

The left tail is where the scare story lives

Averages hide the plans that dominate local headlines. In Equable’s FY 2024 local rankings, Chicago Firefighters (23.7%), Chicago Police (28.5%), Dallas Police and Firefighters (36.7%), and Jacksonville Police & Fire (47.2%) sit deep in distressed territory. Those four alone are enough to make any mayor’s briefing book look radioactive. At the other end, Los Angeles Fire and Police (101.0%), Houston Firefighters (100.0%), Houston Police (95.4%), and Wichita Police and Fire (92.0%) clear resilient thresholds.

That spread is the analytical point. Local public-safety underfunding is concentrated and political, not a uniform national rule. Chicago’s police and fire funds are a municipal fiscal crisis that happens to wear a badge; they are not proof that every local P&F trust is worse than CalSTRS or Texas TRS. The dashboard’s funded-bin and scatter panels make the same point visually: a cluster of resilient mid-sized P&F plans coexists with a small set of very large, very underfunded outliers.

Statewide public safety is the quiet outperformer

If the scare story fails against teachers, it fails twice against the statewide public-safety cohort. Equable’s FY 2024 average for separately valued statewide public-safety plans is 82.1% — 5.7 points above teachers and 5.4 points above municipal P&F. Top-end names in Equable’s statewide rankings include DC Police & Fire (115.2%), Utah Firefighters (110.9%), and Texas LECOS (106.2%). Distressed statewide cases still exist — New Jersey’s state police system appears near 51% in the same ranking set — but the cohort average clears municipal P&F and teachers alike.

One reading is governance and pooling: statewide public-safety systems often sit inside larger investment platforms, with contribution statutes that are harder for a single city council to raid in a bad budget year. Another reading is selection: the classifiable statewide P&F bucket excludes some of the ugliest municipal outliers by construction. Both can be true. For desks comparing employee type rather than administration level, statewide public safety is the cohort that most clearly beats teachers on funded ratio.

Dollar risk still sits with teachers — and with a few cities

Funded ratio is not fiscal exposure. Teacher systems hold most of the dollar shortfall in Equable’s type table. Public-safety UAAL for municipal and statewide classifiable plans combined is under $100 billion; the teacher cohort alone is nearly $580 billion. A city with a 30% funded police plan can still be a larger near-term budget problem for that city than a 70% funded statewide teacher plan is for a state treasurer — because the contribution spike lands on a narrower tax base.

The scatter panel plots approximate liabilities against funded ratios for that reason. CalSTRS-scale teacher plans and Chicago’s police fund occupy different regions of the chart: one is a large, moderately underfunded statewide promise; the other is a smaller but catastrophically underfunded local promise. Rating analysts and budget officers need both lenses. National type averages answer the systematic question; plan-level left tails answer the local crisis question.

Caveats and measurement traps

Equable’s type table only includes plans that are separately valued and classifiable. Blended statewide systems that fold teachers, general employees, and public safety into one reported trust (Florida is the classic example in Equable’s notes) drop out of the teacher and public-safety rows. That exclusion is honest methodology; it also means the table is not a census of every public-safety promise in America. Small local plans under Equable’s liability threshold are mostly absent. Census counts thousands of tiny local trusts that never appear in State of Pensions rankings.

Funded ratios use market-valued assets against GASB total pension liability for recent years — not a risk-free discount rate. Shift the discount rate down a few hundred basis points and every cohort looks worse; the ranking across types can move even when the absolute levels collapse. Contribution policies, amortization methods, and assumed returns also differ. Pew’s longer funding-gap series is useful for contribution-discipline history; it is not a substitute for Equable’s current type cross-section.

The desk sample medians are equal-weight and deliberately include both resilient and distressed large plans so the left tail is visible. They are not probability samples. Treat the +30 pp median gap as a distributional illustration anchored to disclosed rankings, not as a population parameter. Where individual mid-tier plans in the sample are marked estimated, the data module flags confidence explicitly.

What to watch next

Three tapes matter more than another national average. First, whether Chicago’s police and fire contribution schedules close the actuarial gap without crowding out core services — the national “local P&F” narrative rises and falls with a handful of cities. Second, whether statewide public-safety systems keep their funding edge as assumed returns and alternative-investment marks normalize. Third, whether teacher systems’ enormous liability base keeps absorbing the majority of national UAAL even if their funded ratios grind higher after strong return years.

For now, the clean answer to the brief is: local police and fire plans are not systematically worse funded than state teacher plans on Equable’s liability-weighted measure; they are roughly tied, while statewide public safety leads and state-employee-only plans lag. The median gap in a large-plan sample favors public safety even more. The scare story survives only if you stare exclusively at the left tail — and that tail, while real, is not the whole map.