When pension reform happens, new workers often carry the biggest financial burden. But they don’t always have to.
When politicians talk about pensions, it’s usually about the enormous weight they place on government budgets. According to the Volcker Alliance, where we are consultants, state and local governments are on the hook for $1 trillion in unfunded pension liabilities.
Lawmakers on both sides of the aisle push for pension “reform,” a word often used in a positive sense, to rescue dollars that could instead be used for other services. But what about future retirees? Is pension reform positive for them?
In many cases, not so much.