COLA cuts in state-local pensions

Although it is often assumed that public workers have greater benefit protections than their private sector counterparts covered by the Employees Retirement Income Security Act of 1974, this paper finds that state and local governments – particularly those with generous cost-of-living adjustments (C...

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Bibliographic Details
Published inJournal of pension economics & finance Vol. 15; no. 3; pp. 311 - 332
Main Authors MUNNELL, ALICIA H., AUBRY, JEAN-PIERRE, CAFARELLI, MARK
Format Journal Article
LanguageEnglish
Published Cambridge, UK Cambridge University Press 01.07.2016
Subjects
Agreements
Consumer Price Index
Cost of living adjustments
Defined benefit plans
Employees
Fixed rates
Government agencies
Liability
Mediation
Pension fund management
Pensions
Retirees
Retirement
Studies
United States > US
H70
public sector pensions
H75
state and local government
H79
cost-of-living
public sector employees
COLA
pension reform
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Summary:Although it is often assumed that public workers have greater benefit protections than their private sector counterparts covered by the Employees Retirement Income Security Act of 1974, this paper finds that state and local governments – particularly those with generous cost-of-living adjustments (COLAs), fewer benefit protections, and financial pressures on the plan and the sponsoring government – cut COLAs for current workers and, often, for retirees. In most instances, these cuts were upheld by the courts. While the pace of COLA cuts has slowed, they are likely to reappear if plans come under renewed financial pressures.
ISSN:1474-7472
1475-3022
DOI:10.1017/S1474747215000372