The Center For State & Local Government Excellence has released a research study which reviews the types and extent of pension reform since the financial crisis. The most frequent types of reforms include increased employee contribution, reductions in COLAs and pushing out the age and tenure eligibility for retirement.
The article notes that 74% of state plans and 57% of large local plans have cut benefits and/or raised employee contributions. The majority of plans have reduced benefits for new employees.
Subjectively, North by Northwest’s experience in reviewing municipal bond issuers across the country is that despite these reforms and strong investment markets since the financial crisis, net pension liabilities and funding levels continue to deteriorate. Sensitivity to changes in investment returns and discount rates assumptions is far more significant than expected.
Here is a link to the actual study:
