Summary
States and localities – which employ about 14% of the U.S. workforce1 – continue to face the residual effects of tax revenue decreases and pension fund investment losses resulting from the 2008-2009 recession. Coupled with these relatively recent challenges are longer-term budgetary pressures, shifts in workforce demographics, and changes in typical retirement benefits across all sectors of the economy.
In response to these conditions, most state governments and municipalities have reformed their pension plans, often making them less generous, restricting eligibility and sometimes changing plan type. In the midst of these dynamics, public sector employees are concerned about their retirement security.
