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Federal Policies, Local Impact: What Pension Leaders Need to Know
Regardless of where you live, staying informed about federal policy developments is essential. These decisions, no matter the party in power, often have significant ripple effects on state and local budgets and, ultimately, on public pensions.
By: Hank Kim, Executive Director, NCPERSGiven NCPERS headquarters' proximity to Capitol Hill (and my marriage to a long-time federal employee), federal policy is a frequent topic of conversation in my household. But regardless of where you live, staying informed about federal developments is essential. These decisions, no matter the party in power, often have significant ripple effects on state and local budgets and, ultimately, on public pensions.
For instance, you might not immediately connect changes to the Supplemental Nutrition Assistance Program (SNAP) with your pension fund. Yet, new rules under the recently enacted One Big Beautiful Bill Act are expected to reduce federal reimbursements and require costly IT system upgrades. According to the National Association of Counties (NACo), counties could face $850 million in added annual costs, with subnational governments projected to spend $1 trillion over the next decade.
Trade policy is another area where federal decisions can create budgetary uncertainty. In 2024, Pew reported that imports exceeded 20% of state GDP in Indiana, Kentucky, Michigan, and Tennessee—while in Hawaii, South Dakota, Wyoming, and the District of Columbia, imports accounted for less than 3%. These disparities mean that tariff policies will affect states differently, but all must prepare for potential economic shifts.
These examples underscore a critical point: federal policies have real, measurable impacts on state and local budgets and public pensions. Plan sponsors should not look to contributions and benefits as the place to cut costs though. The NCPERS 2025 Public Retirement Systems Study found that pension funds receiving their full actuarially determined contribution—an amount calculated to keep the plan financially healthy—reported funded ratios 20 percentage points higher than those that did not. Over time, this translates into substantial taxpayer savings and greater financial stability.
As purse strings tighten and calls for budget cuts grow louder, now is the time to ensure we're equipped to engage with policymakers and advocate for our funds. One of the best opportunities to do this is at the NCPERS Legislative Conference & Policy Day, held January 26–28 in Washington, DC.
This annual event offers an unparalleled platform for public fund trustees and administrators to connect with Congress, the Administration, and federal agencies shaping public pensions. Whether your plan is actively advocating for a specific issue or simply building relationships, your presence matters. Many lawmakers may not understand the intricacies of pension funding, the important role pensions play in recruiting and retaining public sector employees, or the positive economic effects they may bring to your state. Your voice can help bridge that gap.
Start by connecting with your peers and policy experts at the Legislative Conference (January 26-27) to learn about the important policy and regulatory issues impacting public pensions, then join us on the Hill for Policy Day (January 27-28). NCPERS will schedule and manage your congressional meetings, allowing you to focus entirely on your advocacy efforts. Register now to join your peers in Washington and participate in pension advocacy in action.
Effective storytelling is not only central to advocacy—it's also a cornerstone of member engagement. That's why we're excited to host the inaugural Communications and Member Services Summit in San Diego this March. Designed specifically for pension professionals in communications and member services, this summit will offer insights into stakeholder engagement, beneficiary education, and communication strategy. Peer-to-peer learning and networking will help our community find solutions to shared challenges. View the agenda, and register here to reserve your spot.
We encourage you to view our full 2026 calendar of events and begin planning ahead to take advantage of the many resources available to you through your NCPERS membership. As public pensions navigate a complex investment landscape and face geopolitical and budgetary uncertainties, NCPERS remains committed to supporting our community. As always, feel free to reach out to us at membership@ncpers.org with any questions.
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