A look at changes states are making or considering to pensions for public employees

A look at state pension changes

Highlights of changes to state government pension plans that affect current retirees and employees, and how much unfunded pension and non-pension retirement liabilities — such as retiree health care costs — each state faced as of 2008, according to a study by the Pew Center on the States.

Current retirees:

— Minnesota: State lawmakers in 2010 reduced the annual rate of increase for pension benefits from 2.5 percent to between 1 and 2 percent, depending on the pension fund. Unfunded pension liability: $10.8 billion; unfunded non-pension retiree liability: $1 billion.

— Colorado: New 2010 law calls for no cost-of-living increase for retirees this year, instead of normal 3.5 percent increase. Future increases will be capped at 2 percent. Unfunded pension liability: $16.8 billion; unfunded non-pension retiree liability: $1.1 billion.

— South Dakota: State lawmakers earlier this year replaced a flat 3.1 percent cost-of-living adjustment for retirees with a tiered increase based on the pension fund’s value. Unfunded pension liability: $182 million; unfunded non-pension retiree liability: $76.4 million.

Current employees:

— Wyoming: Beginning Sept. 1, state employees will begin paying 1.43 percent of their salary to the retirement system. It marks the first time in more than a decade they have had to make a direct payment to their own retirement. The state is also increasing its per-employee contribution by 1.43 percent. Unfunded pension liability: $1.4 billion; unfunded non-pension retiree liability: $174 million.

— Mississippi: Legislators voted to require educators and employees of state and local governments to put 9 percent of their pay into the Mississippi Public Employees Retirement System for two years, starting July 1. That’s up from the current 7.25 percent. Unless lawmakers revisit the issue, the employee contribution will revert to 7.25 percent in July 2012. Unfunded pension liability: $8 billion; unfunded non-pension retiree liability: $570 million.

— Connecticut: Last year, Gov. M. Jodi Rell and representatives of the 13 state employee unions reached a $700 million concession agreement to help cover the state’s budget deficit. Part of the deal required employees with less than five years of service to pay 3 percent of their salary toward a trust fund that will help pay for their retiree health benefits. Unfunded pension liability: $15.9 billion; unfunded non-pension retiree liability: $26 billion.

— Rhode Island: In 2009, state officials reduced the value of state pensions for anyone not eligible to retire by Sept. 30 of that year. New state employees will have to be 62 years old to retire. Those already in state service will have a new retirement date set based on their age and years of service. Unfunded pension liability: $4.4 billion; unfunded non-pension retiree liability: $788 million.

— Vermont: A 2010 law changes the retirement age for current employees. For those who are more than five years away from being eligible for normal retirement, they must be 65 years old or have their years of service and age total 90. The state’s retirement age had been 62 years or 30 years of service at any age. Unfunded pension liability: $462 million; unfunded non-pension retiree liability: $17.7 million.