• While there are only a few winners and a much larger pool of losers under current pension systems, a smooth accrual model would allow more teachers to gain secure, retirement benefits from the onset of their careers.
  • Providing Social Security for all public workers would resolve equity issues and gaps in coverage while representing a modest increase in costs for state employers.
  • Despite strong recent stock market returns and states paying an increased share in annual required contributions, pension funding ratios for state and local plans stayed flat. As states begin using a new accounting standard to measure assets and liabilities, funding ratios are likely to decline.
  • Policy changes in Washington State suggest teacher pensions can be reformed in a way that is attractive to both teachers and states.
  • Investment earnings make up around 60 percent of pension benefits. Over the past three decades, state and local pension plans have changed their investment strategies in attempt to boost investment returns. Plans originally invested in fixed-income bonds, but beginning in the 1980s and 1990s, began increasing their investments in stock and equities. In the past decade, plans have increased alternative investments such as private equity, hedge funds, real estate, and commodities.