The Utah Reform Story: Dealing with the Effects of a Recession

Overview:

Prior to 2008, Utah had one of the most sound and best managed pension systems in the country. They had never borrowed from the fund and always made 100 percent of Actuarial Required Contributions (ARC). Then the 2008/2009 market crash happened and Utah’s pension system fell into serious financial trouble. The state’s retirement system lost 22% of its pension assets, opening up a $6.5 billion gap in its pension funding.  With required pension contributions skyrocketing to cover these losses, Utah decided to enact pension reform in March of 2010. 

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The San Jose Reform Story

Overview:

San Jose is the 10th largest city in America and the largest city in Silicon Valley. It has two independent pension plans, both achieving better than a 7.5% return on investments since their inception. The City has always paid the Actuarial Required Contribution (ARC). Even so, annual costs skyrocketed and unfunded liabilities for pensions and retiree healthcare exceeded $3 billion.

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