A recent article points to the fact that there are examples of well-managed public pension systems – and shares a few of their practices.
Bad press has blurred the fact that not all public pension plans are underfunded and overly generous. –Governing
Among the qualities of pension plans that are fiscally sound are:
- They provide moderate benefits and require cost analysis before any change in benefits;
- They provide retirement incomes of between 30 and 50% of an employee’s annual salary, not more; and
- They are supported by mandatory funding requirements in state law.
As described by Governing, beyond providing a good example for public pension plans that are struggling, these strong systems could even inform private sector efforts to expand retirement security.
For more information, see the full story from Governing, Pension Envy: Lessons From Well-Managed Plans.