Millions of people are served by the trillions of dollars in assets attendant to state and local pension plans. More than 200 of those plans are state-run, and the states have not been content to sit idly by with regard to them. Quite the opposite, actually.
U.S. Census Bureau data says that there are 227 state-administered pension plans among the 4,000 public-sector retirement systems. Further, state and local employees comprise almost 14% of the U.S. workforce and 25% of them are not covered by Social Security.
In addition, reports Public Plans Data, those plans have more than 14 million active participants and serve 9 million retirees — and distributed more than $240 billion in 2012, says the National Association of State Retirement Administrators (NASRA). At the same time, state and local pension plans’ funded ratio has fallen in just 12 years from a little over 100% in 2001 to under 80% by 2013.
All of which puts in stark relief the importance of state actions affecting those plans.
They have not been standing pat. According to the Wall Street Journal, in 2015, 45 states enacted pension-related measures, 22% more than three years before. More significantly, the number of bills the states have considered almost tripled during that time to 245 by last year.
Those reforms may aim to serve the participants and retirees by making the plans more solvent, but that does not necessarily equate to higher benefits. According to NASRA, as a result of state pension reforms between 2009 and 2014 new employees generally can expect to receive 1%-20% less in retirement income than current employees. In addition, those new employees can expect to work longer if they want to receive as much in retirement as current employees.
U.S. Census Bureau data says that there are 227 state-administered pension plans among the 4,000 public-sector retirement systems. Further, state and local employees comprise almost 14% of the U.S. workforce and 25% of them are not covered by Social Security.
In addition, reports Public Plans Data, those plans have more than 14 million active participants and serve 9 million retirees — and distributed more than $240 billion in 2012, says the National Association of State Retirement Administrators (NASRA). At the same time, state and local pension plans’ funded ratio has fallen in just 12 years from a little over 100% in 2001 to under 80% by 2013.
All of which puts in stark relief the importance of state actions affecting those plans.
They have not been standing pat. According to the Wall Street Journal, in 2015, 45 states enacted pension-related measures, 22% more than three years before. More significantly, the number of bills the states have considered almost tripled during that time to 245 by last year.
Those reforms may aim to serve the participants and retirees by making the plans more solvent, but that does not necessarily equate to higher benefits. According to NASRA, as a result of state pension reforms between 2009 and 2014 new employees generally can expect to receive 1%-20% less in retirement income than current employees. In addition, those new employees can expect to work longer if they want to receive as much in retirement as current employees.
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