State Pension Reform: What Have They Accomplished?

Abstract

Since 2001, the combined funded ratio of the state level public systems in our data has gone from fully fundined in 2002 to approximately 72% in 2013. In current-year dollars, this translates to a shortfall of almost $1 trillion. We examine the financial impact of pension reform legislation since the beginning of 2009. We found that 49 of 50 states adopted reform legislation during this period; the impact of these reforms on funded ratios has been minimal due to the inability to apply reforms to existing employees. Funded ratios are not expected to improve without significant increases in plan contributions.