State and local pension costs

Abstract

The brief's key findings are: (1) This study examines the long-term effects of pension reforms on employer costs and on state budgets for a sample of 32 plans in 15 states. (2) The results show: (2a) for most plans, the reforms fully offset or more than offset the impact of the financial crisis on the sponsors' costs. (2b) for the sample as a whole, pension costs as a share of state-local budgets are projected to eventually fall below pre-crisis levels. (3) A few caveats: the projections assume that the reforms stick, that plan sponsors consistently make their required payments, and that they earn expected returns. (4) Detailed results for each plan are available in a companion series of fact sheets.