Depending on what assumptions you use, current state and local government workers will earn between $4 trillion and $8 trillion in retirement benefits by the time they retire. But jurisdictions across the nation-from small special districts to large state governments-face a serious problem: in some cases, pension systems have only a fraction of the assets they need to meet their obligations. The existence of massive unfunded liabilities undermines the soundness of pension plans and threatens the fiscal stability of governments.
In almost every case, dealing with these serious problems is guaranteed to be a complex and politically contentious process. But the good news is that a number of jurisdictions have paved the way for substantive reform, and several state and local governments now stand as models from which others can learn.
This handbook aims to capture the experience of policymakers in those jurisdictions and bring together the best practices that have emerged from their reform efforts, as well as the important lessons learned. By presenting these alongside the general principles and approaches that work to reform public policy, this handbook represents a “what you need to know” starter guide for anyone planning to reform their jurisdiction’s pension system.
The handbook begins by outlining the causes of pension problems, before taking the reader through seven pension reform case studies. It offers guidance to policymakers seeking to research their jurisdiction’s pension problem, lays out the general principles of reform, and then examines in detail what it takes to build a successful reform effort from the ground up.
Whether policymakers are looking to create coalitions, engage officials and labor unions, or build the case for reform and take it to the general public, this handbook contains the tools they need to make their efforts a success.
Reason Foundation’s Pension Reform Handbook forms part of a wider effort to advance pension reform across the United States, and to assist policymakers in implementing necessary changes to state and local public employee pension systems. The goal of this project is to introduce fiscally sustainable retirement plans that are fair to both government employees and taxpayers, and that end the practice of passing unfunded liabilities on to future generations.
Policymakers interested in partnering with Reason Foundation should contact Lance Christensen, Reason Foundation’s director of pension reform, at firstname.lastname@example.org.
- Pension Reform Handbook (Hi-Res for printing)
- Pension Reform Handbook: A Starter Guide for Reformers
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Reason Foundation’s Pension Integrity Project has helped policymakers in states like Arizona, Colorado, Michigan, and Montana implement substantive pension reforms. Our monthly newsletter highlights the latest actuarial analysis and policy insights from our team.