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Compensation

Wages and Salaries

Wages and salaries for state and local government workers increased by 3.4 percent for the 12-month period ending March 2026, according to data published by the U.S. Bureau of Labor Statistics. The current value marks the fourth quarter of wage growth below 4.0 percent, following eleven consecutive quarters of growth exceeding that level. 

Wages for private sector workers also increased by 3.4 percent for the same period, which represents the seventh consecutive quarter of annualized growth below 4.0 percent following twelve consecutive quarters above that level. 
Annualized Quarterly Change in Wage and Salary Costs
for Private and State and Local Government Employees, 2001-2026


Benefits

The cost of state and local government employee benefits increased by 3.6 percent for the 12-month period ending March 2026, according to data published by the U.S. Bureau of Labor Statistics. This is the eleventh consecutive quarter of annualized increase below five percent, following four consecutive quarters at or above that level. The rate of annualized increase in the cost of benefits for private sector workers was 3.6 percent for the same period.
Annualized Quarterly Change in Benefit Costs
for Private and State and Local Government Employees, 2001-2026
Compiled by NASRA based on data provided by the U.S. Bureau of Labor Statistics. Data is sourced from the BLS Employment Cost Index program, which is a quarterly survey of establishments measuring the change in employer costs for labor, independent of employment shifts. The ECI survey reference period is the pay period that includes the 12th day of the month. 

See more: https://www.bls.gov/ect/


Become A Member

Becoming a member of NASRA offers a unique opportunity to join a community committed to the sound, efficient, and innovative stewardship of public retirement systems. Membership connects you with a network of professionals and experts, providing valuable insights into managing public retirement systems with a focus on sustainability and risk-averse strategies.

By joining NASRA, you gain the tools and resources to enhance the management of public retirement systems, ensuring their long-term success and reliability for generations to come.

What's New at NASRA: Government Spending Issue Brief

NASRA’s March 2026 update on government spending makes a basic but important point: public pension benefits are not paid out of a government’s day-to-day operating budget. They are paid from trust funds that employees and employers contribute to during an employee’s working years. Those trusts distribute more than $400 billion each year to retirees and beneficiaries in communities across the country. On a national basis, employer contributions to pension trusts in FY 2023 equaled 5.16 percent of direct general spending by state and local governments, which shows that pension contributions remain a limited share of overall public spending even though the level varies from one state to another. 
The brief also shows that pension costs should be viewed in the context of the changes governments have made over the past 15 years to strengthen plan funding. Following the 2008–09 market decline, nearly every state and many local governments adjusted contributions, benefits, or both to improve pension sustainability. More recent data show that employer contributions increased from FY 2022 to FY 2023, but pension spending as a share of total government spending remained broadly stable. The updated brief provides FY 2023 figures and also projects the aggregate pension spending rate for FY 2024, offering a useful snapshot of both current costs and the longer funding trend.