COLA cuts in state-local pensions

Alicia Munnell, Jean-Pierre Aubry and Mark Cafarelli

Journal of Pension Economics and Finance, 2016, vol. 15, issue 3, 311-332

Abstract: 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.

Date: 2016
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Related works:
Chapter: COLA Cuts in State-Local Pensions (2015)
Working Paper: COLA Cuts in State/Local Pensions (2014)
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Persistent link: https://EconPapers.repec.org/RePEc:cup:jpenef:v:15:y:2016:i:03:p:311-332_00

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