Search the News Archive

Revisiting the 'Retirement Crisis' and Retirement Legislation in 2022

"[In] one crucial respect our models may fail us: experts have worked out a set of recommendations for asset allocation and income spend-down in retirement, and a set of projections for building those models, which fall apart if our new low-interest world continues, ... rather than being a temporary situation that resolves itself as we recover from the pandemic."

Will Illinois Botch Local Pension Consolidation?

"[A]ll these pension systems are placed on a funding schedule to reach 90% funding at some point in the 2040s or 2050s, varying by plan. But the Tier 2 liabilities will become an ever greater share of the liabilities, so the relatively small portion of the liability attributable to them in 2019 is not a meaningful measure of the long-term impact of restoring the benefit reductions for new hires.... [T]he 'savings' due to increased investment earnings will not be shared by all police and fire plans uniformly; plans for larger cities will gain less because they are now in a better position than the smaller-asset plans."

No, Public Pension Reform Experiments Have Not Failed

"It is entirely possible for a state or city to properly fund a Defined Benefit pension plan; it just takes discipline ...  But it is only a Defined Contribution program that can wholly remove from legislators the temptation to ask (OK, require) future generations to pay for this year's benefit accruals ... Only a Defined Contribution ensures that the retirement benefit is always by definition 100% funded. And only in a Defined Contribution program is the benefit defined up front and transparent to all."