State Retirement Systems and Pensions

In recent years, state policymakers have been bombarded with warnings about the sustainability of their public pension systems. A Pew Center on the States 2010 report warned that there was a $1 trillion gap between what states had set aside for pensions and the real price tag for those benefits. But after years of bad news, things are starting to look up.  2010 was the first year that public pension systems have shown positive earnings since 2007, just before financial markets – and public pension assets – took a dive. Those retirement systems saw a $722.2 billion loss in 2009 and a $178.8 billion loss in 2008.

The Fiscals Chairs forum featured an in-depth discussion of, and policy options to, one of the thorniest problems confronting state policymakers: public pensions.  As states cautiously recover from the Great Recession, one of the significant fiscal challenges they confront involves devising solutions to boost underfunded and unfunded public pension plans.  During the forum, the fiscal chairs heard from fellow state officials representing three states (Oregon, Rhode Island and California), each tackling unique public pension challenges in innovative ways.

The Fiscals Chairs forum featured an in-depth discussion of, and policy options to, one of the thorniest problems confronting state policymakers: public pensions.  As states cautiously recover from the Great Recession, one of the significant fiscal challenges they confront involves devising solutions to boost underfunded and unfunded public pension plans.  During the forum, the fiscal chairs heard from fellow state officials representing three states (Oregon, Rhode Island and California), each tackling unique public pension challenges in innovative ways.

The Fiscals Chairs forum featured an in-depth discussion of, and policy options to, one of the thorniest problems confronting state policymakers: public pensions.  As states cautiously recover from the Great Recession, one of the significant fiscal challenges they confront involves devising solutions to boost underfunded and unfunded public pension plans.  During the forum, the fiscal chairs heard from fellow state officials representing three states (Oregon, Rhode Island and California), each tackling unique public pension challenges in innovative ways.

The Fiscals Chairs forum featured an in-depth discussion of, and policy options to, one of the thorniest problems confronting state policymakers: public pensions.  As states cautiously recover from the Great Recession, one of the significant fiscal challenges they confront involves devising solutions to boost underfunded and unfunded public pension plans.  During the forum, the fiscal chairs heard from fellow state officials representing three states (Oregon, Rhode Island and California), each tackling unique public pension challenges in innovative ways.

Rhode Island has made three attempts at pension reform in the past three to six years. But last year when lawmakers considered the issue once again, they decided to make it a complete reform, said Richard Licht, Rhode Island director of the Department of Administration.

According to a new report by the U.S. Census Bureau, state and local public-employee retirement systems had $2.7 trillion in total cash and investment holdings in 2010, a $257.2 billion (10.6 percent) increase over 2009. This is the first year that state and local retirement systems have shown positive earnings since 2007, just before financial markets – and public pension assets – took a dive. Those retirement systems saw a $722.2 billion loss in 2009 and a $178.8 billion loss in 2008.

My presentation deals with a topic that has enormous implications for state finances: public pensions. Broadly, my presentation comprises five interconnected parts. Part I explores how the overall condition of state finances impacts state retirement systems. Part II reviews why it is important for policymakers to focus on the financial position of state retirement systems. Part III looks at where we stand in terms of state pensions and Part IV provides a snapshot of several key developments related to these plans. Finally, Part V describes the various strategies deployed in states across the country to bolster their pension systems.

A USA Today piece describes how public employees in 21 states are buying credit toward early retirement or enhanced benefits.  

Good news for the economy in November: The U.S. Bureau of Labor Statistics reported last week that the unemployment rate dropped 0.4 percentage points since October--from 9.0 percent to 8.6 percent – the first meaningful month-over-month decline in nearly a year and the lowest the rate has been since March 2009.

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