Magazine article Government Finance Review

Governments Make Significant Reforms to Retirement Systems

Magazine article Government Finance Review

Governments Make Significant Reforms to Retirement Systems

Article excerpt

A new report issued by the National Association of State Retirement Administrators (NASRA) reviews the unprecedented number and magnitude of pension reforms made by states following the 2008-09 market decline and Great Recession. According to the report, Significant Reforms to State Retirement Systems, the period from 2009 to 2014 saw the greatest period of change in the history of public pensions. While there were no one-size-fits-all solutions, virtually every state made modifications to one or more of its retirement plans. Their approaches shared several overarching characteristics.

States overwhelmingly retained core features known to balance the objectives of retirement security, workforce management, and cost containment sought by stakeholders, including: mandatory participation; employee/employer shared financing; pooled investments; lifetime benefit payouts; integrated survivor and disability benefits; and supplemental savings.

Nearly every state reduced benefits, increased contributions, or both. Most did so while retaining the traditional pension plan. Thirty-six states increased the amount that employees are required to contribute to the pension plan, and 29 states increased eligibility requirements for retirement, which typically took the form of an increase in age, years of employment, or a combination of both to qualify for retirement.

Most of the reforms transferred a higher share of the risk associated with providing retirement benefits from the state or local government to its employees. …

Search by... Author
Show... All Results Primary Sources Peer-reviewed

Oops!

An unknown error has occurred. Please click the button below to reload the page. If the problem persists, please try again in a little while.