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

Alicia H. MunnellJean-Pierre AubryAnek Belbase Josh Hurwitz

SLP#30

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.