The Cost of Pensions

On a nationwide basis, pension costs for state and local governments are roughly three percent of total spending.  According to data from the U.S. Census Bureau, pension costs since 1980 have been reliably stable, averaging from around four to three percent.

Pensions and Retirement Plan Enactments in 2011 State Legislatures

The following report is cross-listed here by permission of its author, Ronald K. Snell of the National Council of State Legislatures:

FINDINGS. Even more state legislatures enacted significant retirement system changes in 2011 than did so in 2010: 29 in 2011, compared to 21 in 2010. Since some states revisited the topic, in all, 41 states enacted significant revisions to at least one state retirement plan in 2010 or 2011.

Will Public Pensions Run Out of Money?

A recent issue brief published by the Center for Retirement Research (CRR) at Boston College, “How Would GASB Proposals Affect Public Pension Funding Levels?,” has created some stir – and is being cited – for its inclusion of the “run-out dates” for 126 public pension plans.

State Hybrid Retirement Plans

Two things about hybrid retirement plans: they are not a new idea; some have been in place for decades. And two, only offering employees a 401(k)-type plan does not meet some retirement security, human resource, or fiscal needs.

A Need for Clearer Analysis—Not More Myths

Read a story about public pensions and it, or the comments left by readers, inevitably blame public workers or more specifically unions (see a current recap by wpri.com reporter Ted Nesi “Public worker wars rage on across U.S. in Ohio, Florida, Mass.,” October 27, 2011).

This is one of the myths that former North Dakota Congressman Earl Pomeroy and his co-author, Cathie Eitelberg, tackled in a June editorial for ABC News:

Myth: Public employee benefits are bankrupting states.

Not so. According to publicly available data gathered from government websites, less than 4 percent of state budget expenditures go to funding pension benefits. A recent study from the Center on Budget and Policy Priorities concluded that state budget shortfalls are largely a result of decreases in tax revenue in part due to falling real estate values and shrinking tax revenue in general.

Taking their lead on myth-busting, let’s examine some quotes that appeared in a recent New York Times article by Mary Williams Walsh: “The Little State with a Big Mess” (October 22, 2011).