“Public Sector Pension Reform: Addressing Pressing Fiscal Realities from a Long-Term Perspective” is a culmination of insights and experiences from state and local officials and researchers from across the nation.
The report highlights several key considerations for public pension reform, including:
- Pension reform should evaluate individual defined benefit and defined contribution plan elements and consider hybrid arrangements of both plan designs that leverage complementary characteristics of each;
- Pension reform must take into consideration changing lifestyle and workforce patterns and should be designed to enable the public sector to compete with private employers for top talent; and
- Plan reform must consider both short-term fiscal challenges as well as long-term human resource trends and objectives. While underfunding issues must be addressed on a state-by-state basis, reform also needs to be considered from a national perspective.
“Plan design is a critical component of reform discussions,” said TIAA-CREF Institute Senior Economist Paul Yakoboski. “While many older defined benefit plans were premised on a career employment model in the public sector, that model no longer fits the experience of many current employees and is even less likely to apply in the future. Future plan design must take into account changing lifestyle and workforce patterns.”
Rockefeller Institute Director Thomas Gais added, “Public pensions and their financing have been divisive issues in many state and local governments in recent years, and meeting pension obligations will continue to be a challenge in many state and local governments for years to come.”The report can be downloaded from the TIAA-CREF Institute website and from the Rockefeller Institute website.