News Archive

"[B]eginning January 1, 2026, if you participate in a governmental 457(b) plan, are age 50 and older and earned more than $145,000 (indexed annually) in the prior calendar year, you must make age-50 catch-up contributions on a Roth basis.... For governmental plans, especially those with multiple participating employers or those that may not have offered Roth contributions before, the Roth catch-up requirement introduces new complexity."  MORE >>

"[F]ederal policies have real, measurable impacts on state and local budgets and public pensions. Plan sponsors should not look to contributions and benefits as the place to cut costs ... [P]ension funds receiving their full actuarially determined contribution ... reported funded ratios 20 percentage points higher than those that did not. Over time, this translates into substantial taxpayer savings and greater financial stability."  MORE >>

"23 states each had over $20 billion in unfunded pension liabilities at the end of the 2024 fiscal year ... Two states had more than $200 billion in public pension debt: California ($265 billion in unfunded pension liabilities) and Illinois ($201 billion). Two other states reported more than $90 billion in unfunded pension liabilities: Texas ($92.2 billion) and New Jersey ($92 billion)."  MORE >>

"Covering a little more than 750,000 lives, the [North Carolina State Health Plan (SHP)] spends between plan costs and employee contributions nearly $4.5 billion annually ... [The SHP] faces an estimated deficit of greater than $500 million for Calendar Year (CY) 2026 and a total projected deficit of $949 million by the end of CY2027. In this article, [the authors] review the challenges that drove the fiscal instability of the North Carolina SHP.... [They] then describe the dynamic, market-driven tools that we are applying to efficiently and effectively control costs with sensitivity to the varied needs of more than 750,000 SHP members."  MORE >>

"September was the sixth straight month of funding improvement for the 100 largest U.S. public pension plans ... During the month, the plans' estimated funded status continued to climb, rising from 84.2% as of August 31, 2025, to 85.4% as of September 30, 2025 ... [T]he gap between estimated plan assets and liabilities narrowed to $971 billion as of September 30, 2025. The last time this deficit fell below $1 trillion was also at the end of 2021, when the funding gap was $833 billion."  MORE >>

"This letter responds to your request for an opinion concerning how to calculate the number of hours of [FMLA] leave available to correctional law enforcement employees who work a fixed 'Pitman Schedule' requiring 12-hour shifts over a 2-week cycle that includes mandatory overtime.... [An] employer seeking to calculate the hourly equivalent of FMLA leave available to an employee should do so based on the employee's actual, normally scheduled workweek.... [A]dditional voluntary hours that the employee may work should not be counted in his or her FMLA entitlement calculation."  MORE >>

"Public sector entities seeking exemption from Social Security must demonstrate that they comply with the requirement that they sponsor a pension plan whose benefits are 'comparable' to Social Security. The most common method of demonstrating compliance is to show that the plan benefits are equal to or greater than a safe harbor that was established in 1991. But does the safe harbor truly ensure that benefits are comparable?"  MORE >>

"Mark Lee Greenblatt who served as Interior Department inspector general, 2019-25 ... opines, 'There's no downside to having independent inspectors general for public pensions.' ... It's no mystery why not a single public pension in America -- not a single one -- has followed Warren Buffett's sagely advice to invest index funds. Not a single public pension in America -- not a single one -- has outperformed, or even met, the index rate of return. Indeed, it seems there's no downside to looting public pensions. "  MORE >>

"Employers typically finance OPEB obligations through either: [1] a Pay-As-You-Go (PayGo) approach; or [2] prefunding through a dedicated trust. In this article, we will compare these two approaches by highlighting their advantages and drawbacks, and comparing their financial impact through a practical case study. This article is intended to increase awareness in the advantages of prefunding OPEB benefits, while also balancing current budget priorities with long-term fiscal sustainability."  MORE >>

"In the fiscal year ended June 30, 2025, the median public pension plan gained 11.3%, well in excess of the median assumed rate of return of 7.00%. This marks the third consecutive fiscal year where the median public DB plan’s return was well in excess of the assumed rate of return (2023: 8.9%; 2024: 10.6%). This bodes well for an improvement in funded status across public plans."  MORE >>

"[In] the proposed regulation issued on January 13, 2025, collectively bargained plans were given additional implementation time. We respectfully request that governmental plans receive the same extension. We submit that governmental plans often face complexities in local law enabling requirements, payroll systems, and administration that most private sector employers do not. Indeed, these challenges can be seen as not dissimilar to those faced by collectively bargained plans."  MORE >>

"Unfunded retiree health care debt is becoming an unsustainable financial burden for state and local governments, as the price tag for Other Post-Employment Benefits (OPEB) grows larger with medical inflation, while assets set aside to pre-fund these obligations remain low.... [A recent analysis] found that states and large municipalities collectively reported $789 billion in unfunded OPEB liabilities, exceeding the $753 billion in unfunded pension liabilities, as of 2022."  MORE >>

"More than half of states prohibit automatic enrollment for public employees, and only about half of the retirement systems that could adopt automatic enrollment provisions have chosen to do so.... Factors explaining lack of interest in automatic enrollment by public employers include increased overhead costs, the perception that governments are already providing an adequate retirement plan, and union concerns about the impact of reduced take-home pay."  MORE >>

"From 2001 to 2023 ... 99% of public pension funds failed to meet their average assumed rates of return.... Despite widespread reductions in assumed returns over the last decade ... 86% of public pension plans still assume returns higher than their 23-year average -- which suggests that further downward revisions ... are likely on the horizon, along with more increases in unfunded pension liabilities and catch-up hikes in government pension contributions."  MORE >>

"As a growing number of U.S. states consider or enact legislation allowing public pension funds to invest in cryptocurrency, a new report ... [urges] states to instead implement statutory prohibitions to protect retiree security.... The report highlights several critical reasons why cryptocurrency investments are deemed unsuitable for public pension portfolios."  MORE >>

"Several bills introduced in California's 2025 legislative session aim to roll back key provisions of the Public Employees' Pension Reform Act (PEPRA).... Proponents of these bills argue that pension enhancements are needed to address recruitment and retention challenges, particularly in public safety roles. However, these assertions are not substantiated by workforce data. California's state and local government turnover rates remain well below both national public sector averages and far below the overall workforce turnover rates in California and the U.S. broadly. "  MORE >>

"he aggregate funded ratio for U.S. state pension plans increased by an estimated 3.4 percentage points during the second quarter of 2025 to end the quarter at 82.0% ... The aggregate funded ratio is estimated to have increased by 2.6% and 4.7% year-to-date and over the trailing twelve months, respectively."  MORE >>

"A second consecutive month of strong investment returns generated a $115 billion increase in the PPFI plans' funded status during June. In aggregate, the plans saw estimated market gains of 2.3% for the period, with individual plans' estimated returns ranging from 1.5% to 3.6%. These results lifted the value of plan assets from $5.327 trillion as of May 31 to $5.457 trillion as of June 30"  MORE >>

"The estimated ratio of pension assets to promised benefits has increased over the last two years by 1.5 percentage points to 77.7 percent. This increase reflects a boost in assets from higher contributions and solid returns, and the realization of benefit cuts scheduled for new employees. The impact of these positive fundamentals is partially offset by: [1] negative cash flows associated with maturing plans; and [2] basic growth in benefit liabilities."  MORE >>

"This model legislation sets the major elements for the retirement plan, including provisions regarding employee eligibility and participation, vesting, contribution amounts, investment structures, benefit forms, recordkeeper structures, and plan governance and administration. The model legislation also requires communicating with and educating plan participants on the plan and the shared responsibility of employers and employees in creating a successful retirement program. It requires participants to be checked periodically to assess whether each participant is on track to meet their retirement needs and objectives, and to recommend corrective actions."  MORE >>

"Without the ability to retain and understand lessons from past mistakes in designing, funding, and managing public pensions, public policymakers are doomed to repeat the same pension management errors and create new cycles of pension problems for the state, local governments, and taxpayers."  MORE >>

"Mandatory employee contributions to a governmental retirement plan can be picked-up and treated as pre-tax contributions only if two conditions are met: [1] the plan requires the pick-up and [2] the employee has no election with respect to the amount or duration of the contribution after the employee's initial employment."  MORE >>

14 pages. "Fixed employer contribution rates provide budget stability for employers but may result in funding shortfalls, depending on actuarial experience. Many so-called fixed-rate plans incorporate strategies such as statutory adjustments, supplemental funding sources, or benefit modifications to maintain actuarial balance. Some plans exhibit characteristics of both fixed and variable contribution policies, challenging traditional classifications and emphasizing the need for adaptable funding strategies."  MORE >>

"Legislation had been introduced in both chambers of the state legislature would have deleted the time limitation for DROP eligibility for certain instructional personnel. It also would have expanded the reach of the DROP program to include education-related administrative personnel and educational support employees.... Since the legislation failed, language concerning DROP participation that would have been stricken from Florida law remains in place."  MORE >>

"DB plans provide the foundation of retirement security with guaranteed income and risk pooling, while well-designed DC plans offer flexibility and additional savings opportunities.... By prioritizing strong governance, responsible portfolio allocation, and thoughtful plan design, leaders can ensure long-term stability and meet the evolving needs of retirees."  MORE >>