State and Local Pension Costs: Pre-Crisis, Post-Crisis, and Post-Reform

Alicia H. Munnell, Jean-Pierre Aubry, Anek Belbas, and Josh Hurwitz
Publication Date: 
March 2013

This study examines the long-term effects of pension reforms on employer costs and on state budgets for a sample of 32 plans in 15 states. The results show:

  • for most plans, the reforms fully offset or more than offset the impact of the financial crisis on the sponsors’ costs.
  • for the sample as a whole, pension costs as a share of state-local budgets are projected to eventually fall below pre-crisis levels.

A few caveats: the projections assume that the reforms stick, that plan sponsors consistently make their required payments, and that they earn expected returns.