Updated with correction
An unprecedented push by state governors and legislators in 24 states to change the rules governing pensions for public employees could significantly remake many of the nation's public retirement systems.
Among the changes being proposed:
• increasing current employee pension contributions (Alabama, Kansas, Maine, New Jersey, Ohio, Wisconsin, Arizona, Illinois);
• taxing pension income (Hawaii, Michigan);
• reducing/freezing cost-of-living increases (Maine, Ohio, Oklahoma);
• eliminating COLAs (Arizona, New Jersey);
• rolling back increases in the formula for benefit payments (New Jersey);
• shifting employees to a mandatory defined contribution or hybrid plan (Arizona, Florida; Kentucky, Nevada, New Hampshire, North Carolina, North Dakota);
• stopping pension spiking (California and Massachusetts);
• increasing vesting requirements or retirement age (Connecticut, Illinois, Maine, Maryland, Massachusetts, North Carolina); and
• making employees contribute to the plan (Florida, Oregon).
Ron Snell, senior fellow at the National Conference of State Legislatures in Denver, said these are among the most prominent proposals from governors and/or lawmakers. He said legislators alone introduced 3,500 bills regarding pension plan changes in the first two months of 2011.
“The pace is very rapid this year,'' said Mr. Snell.
He said there is a good chance that the number of proposals to be enacted this year could surpass 2010, a record year in which 21 states underwent pension system changes.
Mr. Snell said the election of new Republican governors and the tea party movement have hastened the number of pension initiatives, but he noted there also are Democratic governors — such as in New York, Connecticut and California — who are proposing changes.
He said the fiscal problems of many pension plans have created an untenable situation for states that are facing their own financial crises.