NASRA Updates Issue Brief on Employee Contributions to Public Pension Plans

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NASRA Updates Issue Brief on Employee Contributions to Public Pension Plans

On September 23, 2026, the National Association of State Retirement Administrators (NASRA) updated its issue brief, Employee Contributions to Public Pension Plans. The brief presents an analysis of employee contribution plan designs, policies and recent trends.

According to the brief, almost all state and local government employees are required to contribute to the cost of their retirement benefits. The report also indicates that about 25% to 30% of state and local government employees do not participate in Social Security. In many cases, those who do not participate in Social Security have a higher pension benefit and higher required contributions as compared with those who do participate in Social Security. 

As reported in the brief, “since 2009, 41 states increased required employee contribution rates. Higher rates in some cases apply only to new hires, and in other cases, the higher rates apply to all active plan participants. As a result of these changes, the median contribution rate paid by employees has increased.” It also added, “the median contribution rate has risen to 6.2 percent of pay for employees who also participate in Social Security, and to 9.0 percent for those who do not participate in Social Security. The most recent changes, reflecting rates in effect in September 2026, are a result of incremental increases in rates for a few plans.”

The legality of increasing employee contributions varies by state. In some states, courts have ruled that legislative efforts to increase employee contributions are a violation of the state constitution or contractual rights. However, in other states, higher employee contributions have either withstood or have not been subject to legal challenges. 

The brief states, “Traditionally, state legislatures have been responsible for determining employee (and employer) contribution rates for public pensions. Under this approach, enactment of a change to the employee contribution rate typically has required an act of legislation and approval by the governor. A few states in recent years have granted limited authority to retirement system boards to adjust contribution rates for employers and employees without the need for legislative intervention.”

The brief also includes an appendix of employee contribution rates for over 100 public pension plans and identifies whether or not plan members have Social Security coverage.

The brief is available here.

CRR Reports on the Increase in Alternative Investments in Public Pension Plans

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CRR Reports on the Increase in Alternative Investments in Public Pension Plans

On September 8, 2026, the Center for Retirement Research (CRR) at Boston College published its issue brief, Explaining the Rise in Alternative Investments in Public Pension Plans. From 2001 to 2021, the brief indicates that the investment trend for U.S. public pension plans has decreased for public equities and fixed-income assets whereas it has increased for alternative assets (such as private equity and real estate) from about 10% to 30%.

Other key findings include:

  • Since the early 2000s, public pensions have allocated more investments toward alternative assets like private equity and real estate, which have varied greatly among different pension plans.
  • The analysis investigates the changes in plans’ beliefs about the future investment returns for alternative assets and their risk tolerance.
  • The findings indicate that there is a growing belief that alternatives will outperform public equities mainly due to consultant views, peer behavior, and plan experience during the 1990s.
  • In contrast, other factors related to plans’ risk-seeking motives, spending needs, and governance have a more limited effect.

The CRR concludes, “the primary driver behind the increased allocation to alternatives is the growing belief among plan managers that alternatives will outperform public equities on a risk-adjusted basis.”

The brief is available here.

NCPERS Publishes Report on Measuring the Fiscal Sustainability of Public Pensions

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NCPERS Publishes Report on Measuring the Fiscal Sustainability of Public Pensions

Recently, the National Conference on Public Employee Retirement Systems (NCPERS) released its report, Measuring the Fiscal Sustainability of Public Pensions. The updated NCPERS study examines the sustainability valuation to monitor pension plan fiscal conditions. The findings indicate that the national outlook continues to improve for public pension plan funding. The research report indicates that, “public pensions are more sustainable than they have been in over twenty years, showing significant improvements when evaluated against long-term benchmarks.”

According to the report, “public pension liabilities are fiscally sustainable relative to state and local economic capacity. The national sustainability ratio has now been below its long-run average for four consecutive years, the longest sustained period of below-benchmark sustainability since 2002–2008, and 48 of 50 states are at or below their own benchmarks as of 2024. Both figures represent dramatic improvements from the picture at the close of the original study, when 45 states were above their benchmarks and the national ratio had been above its long-run average for more than a decade.”

The report also provides an appendix with a state-by-state sustainability analysis from 2002 to 2024.

Further information is accessible here.

MissionSquare Publishes Report on Retirement and Financial Decision-Making Among Public and Private Sector Employees

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MissionSquare Publishes Report on Retirement and Financial Decision-Making Among Public and Private Sector Employees

Recently, the MissionSquare Research Institute released its survey report, How to Help Retirement Plan Participants Make Optimal Financial Decisions. The research examined the differences between public sector and private sector employees’ retirement and financial decision-making. Some factors analyzed include how employees: 1) seek financial advice; 2) make investment decisions; 3) adopt technology; and 4) plan for retirement income.

The primary data set was based on a national retirement and financial wellness survey conducted by the Institute and Greenwald Research in December 2025. The survey included over 1,000 full-time state and local governmental employees and over 1,000 full-time private sector employees. The survey categorized public sector and private sector employees based on whether they participated in defined benefit (DB) plans only, defined contribution (DC) plans only, or both DB and DC plans.

According to the report, “Among workers who have a DB plan, public sector participants expect pensions to cover a larger share of retirement expenses and report higher expected monthly pension benefits than private sector participants. This is an important contextual difference. A worker who expects a DB pension to provide a meaningful share of retirement income may rationally approach DC saving, investment risk, and annuitization differently from a worker who expects to rely mostly on accumulated DC assets.”

The report is available here.

NIRS Reports on Americans’ Views of Retirement Insecurity in 2026

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NIRS Reports on Americans’ Views of Retirement Insecurity in 2026

On August 26, 2026, the National Institute on Retirement Security (NIRS) released its report, Retirement Insecurity 2026: Americans’ Views of Retirement. According to the report, about 80% of Americans expressed concern that the nation is facing a retirement crisis, up significantly from 67% in 2020. In addition, over 60% are concerned that they will not achieve financial security in retirement. Some factors contributing to respondents’ concerns include inflation (73%), market volatility (62%) and possible Social Security benefit reductions if Congress fails to take action (76%).

Other key findings include:  

  • About 76% of survey respondents expressed strong support for pensions to provide financial security in retirement while 84% of workers and retirees who have participated in a pension are confident those benefits will help them achieve a secure retirement;
  • About 79% of Americans feel the average worker cannot save enough on their own for retirement security;
  • Affordability issues are making it more difficult for workers to save for retirement with 41% of respondents being concerned about paying down debt, 39% are worried about high housing costs, 30% are concerned about emergency expenses, 25% are worried about health care and medical expenses, 13% concerned about lack of access to workplace retirement plans, and 12% worried about childcare costs;
  • Among current workers, 75% indicated that retirement benefits are a very or extremely important factor when evaluating job opportunities;
  • Almost 50% of the respondents reported having less than $100,000 saved for retirement and 18% reported having no retirement savings;
  • Over 60% of Americans have used an Artificial Intelligence (AI) tool, but the majority are not comfortable with it delivering financial advice although there may be potential uses for AI as a financial resource (i.e., budgeting, investing and tax planning); and
  • Over 50% of the respondents oppose employers offering cryptocurrency as a workplace retirement savings investment option due to potential risks.

The report concludes, “strengthening retirement security will require a comprehensive approach – one that expands access to retirement plans, encourages lifetime saving, improves financial literacy, and supports workers as they navigate an increasingly complex retirement landscape.”

The report findings are based on a nationwide survey conducted by Greenwald Research with online interviews between October 24, 2025 and November 14, 2025 with a total of over 1,200 individuals aged 25 and older.  The final data were weighted by age, gender and income to represent the demographics of Americans aged 25 and over.

The report is available here.

CRR Updates Public Plans Database

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CRR Updates Public Plans Database

On August 6, 2026, the Center for Retirement Research (CRR) at Boston College announced that the Public Plans Database (PPD) has been updated with Fiscal Year (FY) 2025 data. The PPD is a comprehensive database of about 250 major state and local government defined benefit (DB) pension plans.

The newly released update includes detailed annual data from 2001 through 2025 for the largest U.S. state and local pension plans based on financial reports released through May 30, 2026. The sample comprises about 95% of U.S. state and local pension assets and members. The next PPD update is scheduled for January 2027, which will include financial reports available as of October 30, 2026.

The PPD is developed and maintained through the collaborative efforts of the CRR, MissionSquare Research Institute, the National Association of State Retirement Administrators (NASRA), and the Government Finance Officers Association (GFOA).

​The PPD is available here.

NCPERS Reports on AI Adoption and Strategy in Public Pension Administration

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NCPERS Reports on AI Adoption and Strategy in Public Pension Administration

On August 4, 2026, the National Conference of Public Employee Retirement Systems (NCPERS) released its research brief, AI Adoption and Strategy in Public Pension Administration. The brief indicates that the public pension administration industry is optimistic about the potential of AI, but remains diligent about its implementation. Importantly, as AI adoption evolves, the priorities continue to support human judgment and risk management.

The key survey findings include:

  • 58% of the respondents reported being optimistic or very optimistic about the impact of AI on defined benefit pension administration in the next 10 years;
  • When AI is utilized, about 96% of the respondents cited that the main driver of decisions is human judgment;
  • Over 60% indicated that the primary obstacle to AI expansion is a lack of internal technical expertise to evaluate and manage AI tools; and
  • More than 40% are greatly concerned about cybersecurity vulnerabilities from AI systems or vendors.

According to NCPERS, “The overall pattern of AI adoption is one of cautious, productivity-focused experimentation. Lower-risk operational functions, such as member communication, customer service, and administrative tasks, show the highest rate of active AI use.”

The report is available here.

NASRA Publishes Overview of Public Pension Asset Valuation Methods

   

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NASRA Publishes Overview of Public Pension Asset Valuation Methods

Recently, the National Association of State Retirement Administrators (NASRA) published its issue brief, Overview of Public Pension Asset Valuation Methods. The brief is based on a new NASRA dataset with a representative sample of 129 of the largest U.S. state and local pension plans. It provides information on the use of asset smoothing among public pension plans and the level of consistency in prevailing asset valuation method practices.

According to the brief, “Asset smoothing promotes stability of the plan’s funding level, improves budget predictability for employers, and aligns with the long-term nature of pension liabilities and investment strategies. The duration of the smoothing period can affect how quickly market gains and losses are reflected in the plan’s condition and how closely the plan’s funding value of assets aligns with the market value of assets.”

Some of the key findings include:

  • Most public pension plans smooth the recognition of investment gains and losses over a period of years;
  • The majority of public pension plans use a five-year smoothing period; and
  • Many public pension plans utilize a corridor arrangement to specify the amount that the actuarial value of assets can diverge from market value.

The brief concludes, “Although individual plan asset valuation methods vary, most plans seek to balance funding level and contribution stability with timely recognition of investment gains and losses through asset smoothing and, in many cases, corridor provisions designed to maintain a reasonable relationship between the actuarial value of assets and the market value of assets. As markets remain volatile and plan funding policies continue to receive attention, understanding these practices provides important context for evaluating factors that contribute to the determination of plans’ funding conditions and required costs.”

The brief also provides an appendix identifying the most recent asset smoothing periods and corridors for the individual plans in the dataset as of fiscal year 2025.

The brief is available here.

CRR Publishes Issue Brief on Medicare 2026 Trustees Report

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CRR Publishes Issue Brief on Medicare 2026 Trustees Report

On July 15, 2026, the Center for Retirement Research (CRR) at Boston College published its issue brief, Medicare Finances: A Perspective on the 2026 Trustees Report. The brief summarizes the current state of Medicare’s finances based on the 2026 Medicare Trustees Report released in June 2026.

The brief provides: 1) an overview of the Medicare program; 2) the 2026 Medicare Trustees Report’s projections that use current law assumptions; 3) a comparison of the current-law projections to an alternative scenario prepared by Medicare’s Office of the Actuary; and 4) some possible reasons that Medicare’s expenditures are expected to outpace Social Security.

The report indicates that Medicare is the largest U.S. public health program that covers nearly all individuals age 65 and over in addition to those who receive federal disability insurance benefits. According to the report, the Medicare program accounts for 21% of the national health care spending and 14% of the federal budget.

Some of the other key findings include:

  • Overall, the Medicare program, which operates within the U.S. health care system, is very expensive and costs twice as much as health care systems in other countries.
  • The findings indicate that if the constraints on reimbursements to physicians and hospitals prevent Medicare beneficiaries from accessing care, it is likely that costs will increase significantly higher than the Trustees project.
  • Medicare Advantage plans cover more than 50% of beneficiaries, which costs 14% more per person than traditional Medicare.
  • Controlling Medicare costs should be addressed that would require a long-term plan to redesign the U.S. health care system and, in the short term, reduce overpayments for Medicare Advantage plans.

The brief states, “In contrast to Social Security, where population aging can explain all the growth in expenditures over the next 30 years, an aging population explains much less than half of projected future growth in Medicare. The rest comes from the costs for hospital and physician services rising faster than [Gross Domestic Product] GDP.” It adds, “With Medicare growing so quickly, its outlays will surpass Social Security expenditures in 11 years. And by 2100, the end of the projection period, Social Security accounts for 6.7 percent of GDP, while, as noted, Medicare equals 7.5 percent under the Trustees’ current-law assumptions and 9.8 percent under the actuaries’ alternative projections. It should be at the top of everybody’s worry list.”

The brief is available here.

American Academy of Actuaries Publishes Brief on the Actuary’s Role in Public Pension ALM Studies

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American Academy of Actuaries Publishes Brief on the Actuary’s Role in Public Pension ALM Studies

Recently, the American Academy of Actuaries (AAA) published its issue brief, The Actuary’s Role in Public Pension ALM Studies. This publication was prepared by members of the AAA’s Public Plans Committee. The brief provides information on an approach for public pension plans to help improve risk management by using an Asset Liability Management (ALM) study. Although some ALM studies may be conducted by investment advisors alone, the brief discusses the importance of collaborating with the plan’s actuary to ensure a comprehensive risk management approach.

According to the brief, “An ALM study takes a holistic approach that integrates forecasts of assets and liabilities to inform policy decisions for managing a pension plan. It can be used to assess a pension plan’s investment policy, contribution policy, or any other policies or measures that depend on the changes in assets and liabilities under various scenarios.”

The brief concludes, “To maximize the benefits from an ALM study, the analysis should go beyond investment performance to include a range of implications such as contribution requirements, funded status, and, when applicable, changes in benefits. Actuaries, with their expertise in liability measurement and funding methods, are critical to understanding tradeoffs involving plan funding. Investment professionals bring insight into the asset and operational risks of investment policies and portfolios. Ultimately, combining the expertise of actuaries and investment professionals may allow the system to better satisfy the fiduciary responsibilities of governing a public pension plan.”

Among other members, the AAA’s Public Plans Committee includes Judith Kermans, President, CEO and Senior Consultant at GRS. In addition, the AAA’s Committee recognized the contributions of James Rizzo, a retired Senior Consultant of GRS. 

The issue brief is available here.