The U.S. economy has not been healthy since 2001 when 9/11 pushed the country into a recession. As the accompanying data tell us, real GDP growth has risen to meet the long-term average of 3.11 percent just once since 2001, and that was in 2004. The combination of wars, financial collapse, natural disasters, and political games has taken a heavy toll on economic growth. No one is talking about 3 percent or better growth anytime in the foreseeable future. But it’s not just about Democrats and Republicans. It’s about something deep in the economy.

This working paper shows how Rhode Island’s state and municipal pension systems face large and growing unfunded pension liabilities and provides recommendations for reform.

America’s fiscal mess, coupled with poor management in the past and changing demographics, guarantees that public pension systems across the country will be reformed. At the margin, the case for more radical shifts from defined benefit to defined contribution plans is strong.

This study focuses on public sector benefits costs in the state of New Jersey. Along with several other states, New Jersey’s pension system is badly underfunded and health care and other benefits for public sector workers are entirely unfunded.