New Brunswick’s New Shared Risk Pension Plan

Alicia H. Munnell Steven A. Sass

SLP#33

The brief’s key findings are:

  • Under financial pressure, U.S. state and local pension plans have curbed future benefit costs.  But these changes have been ad hoc and unexpected.
  • New Brunswick’s new Shared Risk model is designed to respond to shocks in a more orderly and predictable way and to help head off trouble in advance.
  • The model’s key features are:
    • splitting benefits into “base” and “ancillary” components;
    • laying out detailed steps in advance for adjusting benefits and contributions; and
    • creating a risk management framework to help keep plans on track.