Pension Politics: Public Employee Retirement System Reform in Four States

Patrick McGuinn
Publication Date: 
February 26, 2014

Public pension systems across the U.S. are facing significant unfunded pension liabilities. While politics have frequently hampered the efforts to reform state pensions systems, several states have successfully passed significant reform to their pension systems.

In this paper, McGuinn examines the political dynamics around public sector pensions and pension reform. In particular, McGuinn examines four cases of state pension reform: Utah, Rhode Island, New Jersey, and Illinois. Of the states, McGuinn believes that Utah and Rhode Island enacted significant structural changes to their pension systems while more limited, less innovative changes occurred in New Jersey and Illinois.

Based on his analysis of these case studies, McGuinn makes the following policy recommendations:

  • Avoid turning pension reform into an ideological issue
  • States need a credible and visible reform champion
  • Reform advocates must gather and disseminate accurate data, and clearly communicate the reality of their state’s pension liability
  • Demonstrate pensions’ impact on taxes and other state spending priorities
  • Sell the benefits of pension reform to state workers
  • Sell the benefits of pension reform to school reformers
  • Anticipate and plan for legal challenges