State and Local Pension Costs: Pre-Crisis, Post-Crisis, and Post-Reform

Source: Alicia H. Munnell, Jean-Pierre Aubry, Anek Belbase and Josh Hurwitz, Center for Retirement Research at Boston College, State and Local Pension Plans, SLP#30, March 2013

The brief’s key findings are:
– 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.
– The results show:
* for most plans, the reforms fully offset or more than offset the impact of the financial crisis on the sponsors’ costs.
* for the sample as a whole, pension costs as a share of state-local budgets are projected to eventually fall below pre-crisis levels.
– A few caveats: the projections assume that the reforms stick, that plan sponsors consistently make their required payments, and that they earn expected returns.
– Detailed results for each plan are available in a companion series of fact sheets.