State Pension Battles Loom

In more than 30 states, AFSCME is fighting legislation to reduce pension benefits and shift more of the pension costs to public service workers and retirees.

In more than 30 states, AFSCME is fighting legislation to reduce pension benefits and shift more of the pension costs to public service workers and retirees.

Depending on the state, proposed changes include higher worker contribution rates, lower cost-of-living adjustments (COLAs) for current and future retirees and various combinations of the following requirements that would make it harder to earn a public pension: longer vesting periods (five years to 10, for example); higher retirement ages; more years of service; formulas that look back at more years to determine Final Average Salary (for example, switching from the highest three wage years to the highest five); and reduced benefits for early retirees.

Also, some states would change the structure of traditional public pension plans, replacing them with defined-contribution/private-investment accounts plans for all new hires. These plans would lack basic protections and benefit guarantees for future workers and retirees.

States that are considering (or have already made) pension changes include: Arizona, California, Colorado, Connecticut, Delaware, Florida, Hawaii, Illinois, Indiana, Iowa, Kansas, Kentucky, Maine, Maryland, Massachusetts, Minnesota, Missouri, Montana, Nevada, New Hampshire, New Jersey, New Mexico, New York, Ohio, Oklahoma, Oregon, Pennsylvania, Rhode Island, South Dakota, Tennessee, Utah, Vermont, Virginia, Washington and Wisconsin, as well as the District of Columbia.