How changes in state pension plans affect public employees' retirement income.

Since 2009, nearly all states have responded to fiscal constraints by making changes to their retirement plans, including increasing employee contributions, reducing benefits, or both. Other states have modified their plan designs, choosing to transfer more of the risk associated with providing retirement benefits from the state and its political subdivisions to its employees.

A new report from the Center for State and Local Government Excellence and the National Association of State Retirement Administrators gauges the effects of changes in state pension plans on the retirement income of retirees. The report, Effects of Pension Plan Changes on Retirement Security, calculates the projected initial retirement benefit of state and local employees before and after recent modifications were made to pension design and financing.

The report also summarizes interviews conducted with public-sector human resource executives and retirement experts from 10 states that have made significant pension plan changes: Alabama, California, Colorado, Hawaii, Missouri, Ohio, Pennsylvania, South Carolina, Tennessee and Virginia.

The report's key findings include:

* Pension reforms reduced the amount of the initial retirement benefit new employees can expect to receive, compared with that of existing employees. Reductions ranged from less than 1 percent to 20 percent and do not account for inflation or cost-of-living adjustments, which have been reduced or eliminated in many states.

* New employees can expect to work longer and save more to reach...