Industry News

In December 2018, the National Association of State Retirement Administrators (NASRA) updated their report, Spotlight on Significant Reforms to State Retirement Systems, 2018.  NASRA updated their previous report published in 2016 which covered the state pension reforms enacted between 2009 and 2014.

Some of the key findings include:

• Since 2009, 23 states have introduced or added one or more risk-sharing plan design features for broad employee groups. These include new hybrid plans, variable contribution rates, and benefits, including COLAs, that may change based on external factors, such as the fund’s investment performance or the plan’s funding condition.
• 29 states increased retirement eligibility, affecting over 40 plans, and typically increased age, years of service or both; and
• Almost all states retained traditional pension plans and modified employer and employee contributions, restructured benefits or both. 

The report indicates, “Since 2009, nearly every state passed meaningful reform to one, or more, of its pension plans. Although the global market crash and recession affected all plans, differing plan designs, budgets, and legal frameworks across the country defied a single solution; instead, each state met its challenges with tailored changes specific to its unique circumstances.”

The report also includes an appendix with a state-by-state listing of pension reforms for state retirement systems and identifies the applicable changes from 2009-2018. The listing presents detailed descriptions of changes affecting various combinations of contributions, benefits, and eligibility for retirement plans that were affected by pension reform legislation in each state.

The report is available here.