Report on pension reform in the U.S.

June 14, 2016

The National Association of State Retirement Administrators (NASRA) recently completed a comprehensive review and compilation of public pension reforms since the Great Recession and the global financial crisis. According to the report, Significant Reforms to State Retirement Systems, the period from 2009 to 2014 marked 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.

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.
• Twenty-nine 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.

Reforms enacted in one state were not necessarily appropriate for another. Generally, states made modifications to their pension plans commensurate with the extent of their fiscal issues, to ensure the long-term sustainability of the plan.

Also, read the joint letter to the editor from TRSL and LASERS about pension reform that recently appeared in The Advocate (Baton Rouge): Letters: Optimism is alive in the form of Louisiana’s pension reform