Public Pension Pressures in the United States

Olivia S. Mitchell

Abstract — This paper discusses why public pensions have warranted so much interest of late, focusing on their financing status and reform options. Many state pension plans are underfunded, and while they can pay promised benefits for some years, there is also enormous cross-state heterogeneity and several state pension plans will require substantial new revenue and/or benefit cuts to bring them to long-term solvency. What remains to be seen is how the burden of returning the plans to financial health will be borne, and how key stakeholders will implement reforms in these systems if they are to return to viability before time runs out.