Longer life: It's as much a blessing as a retirement planning conundrum - and not one for retirees alone. As much as individuals need to adjust their financial plans to account for longevity, the same is true of companies and governments that provide retirement benefits.
For states and municipalities, providers of public pension plans, the challenge is balancing near-term budgetary and operating requirements with the long-term liability of funding pension and retiree healthcare benefits. The balancing act was complicated by the financial crisis and "Great Recession." Not only had it become difficult to arrive at workable budgets, but the pension burden loomed larger as market losses caused pension asset pools to shrink, bringing funded ratios to unhealthy lows.
Why Pensions Matter to Municipalities
The challenge for fiscally strapped U.S. states and cities is twofold:
1. They must deliver on the promise to provide public employees (past, present and