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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.
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All findings, interpretations, opinions and conclusions of this paper represent the views of the author and not those of the Wharton School or the Pension Research Council, or any other institution with which the author is affiliated. © 2011 Mitchell and the Pension Research Council of the Wharton School of the University of Pennsylvania. All rights reserved.
The author acknowledges research support from the Pension Research Council/Boettner Center at the Wharton School of the University of Pennsylvania, and helpful comments from Robert Clark and Peter Conti-Brown.
Date Posted: 28 June 2019