In-depth: Risk Sharing in Public Retirement Plans

Introduction

Nearly every state in recent years enacted reforms to pension plans within their purview. As a result, although most public employers in the U.S. have retained DB plans, in many plans, more risk has shifted from employers to employees.

The purpose of this paper is to increase knowledge and awareness of the wide variety of options that are currently being used to design and finance retirement benefits; it is not an endorsement of any particular plan design or feature. This paper describes risk-sharing features that are incorporated into public pension plans and provides case studies of specific plans that employ risk-sharing structures.

Date published

January 2019

Contact

Keith Brainard, Research Director
Alex Brown, Research Manager

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What's New at NASRA: Updated Cost of Living Issue Brief

Cost-of-Living Adjustments (COLAs) play a significant role in public pensions. They help retirees keep up with rising prices, but they also add costs to pension plans. Policymakers and plan sponsors are tasked with balancing three things: benefits adequacy, plan sustainability, and affordability for members and plan sponsors.
The recent increase in inflation caused many policymakers and, in some cases pension trustees, to review how benefits are designed and paid for, including the way COLAs are granted and funded. NASRA’s recently updated issue brief on the lates trends in COLAs is available in the NASRA Research Center.