State and Local Pension Reforms Since the Financial Crisis
This issue brief examines state and local pension reforms in the aftermath of the financial crisis.
- Jean-Pierre Aubry, Caroline V. Crawford
- Publication date:
- December 2016
- Filed under:
- Research Studies
- Key findings:
- 74 percent of state plans and 57 percent of large local plans have cut benefits and/or raised employee contributions to curb rising costs.
- While the majority of state and local plans reduced benefits for new employees only, 25 percent also cut benefits for current employees.
- The two most common benefit reductions for current employees were increases in employee contributions and reductions to the COLA.
- New employees experienced the greatest reductions in core benefits, most commonly: (1) increases in the age and tenure required to claim benefits and (2) reductions in the benefit multiplier and lengthening the period used to calculate final average salary.
- Plans more likely to make cuts had the highest annual required contribution (ARC) as a percentage of revenue or had lower employee contributions.
- Download publication:
Pension reform has been widespread in state and local governments in the aftermath of the financial crisis. This issue brief examines the pattern of reforms, what changes have been the most common, legal protections, and what factors are associated with the reforms.
Authors Jean-Pierre Aubry and Caroline V. Crawford examined the data from 2009-2014 from all 114 state plans and 46 local plans in the Public Plans Database and an additional 86 local plans.