Reexamining Public Pension Plans

Abstract

Although the present fiscal climate may create the temptation to rush ahead with aggressive cost-cutting measures, a knee-jerk reaction in response to the immediate budget or political environment is unlikely to result in a public sector retirement program that meets the long-term needs of employers, employees or taxpayers. States and municipalities still need to assess the extent to which benefits provide an “adequate” retirement income, examine how the plan distributes retirement risks between employers and employees and evaluate whether the plan is still meeting the employer’s workforce management goals. Careful planning and quality analysis are the keys to a successful plan redesign effort.