State of pensions.

• Position: TRENDS AND TRANSITIONS

Twenty-six state legislatures have made significant changes to their retirement systems so far this gear. Over the last two years, 39 states in all have enacted substantial revisions to at least one state retirement plan. With just two exceptions (Michigan and Utah), state lawmakers have revised rather than replaced traditional defined benefit pension plans.

Legislation on pension reform, as of the end of July, was pending in Massachusetts and Ohio, and the governors of California and New York had proposed changes that were likely to be considered later in the year or in 2012.

The changes include:

INCREASING EMPLOYEE CONTRIBUTIONS. Sixteen legislatures increased employee contribution amounts this year, and nine did so last year. The increases apply to all current employees in 18 states and only to new employees in seven states. In nine of these states, contributions by employers were reduced, reflecting a trend toward equalizing employee and employer retirement contributions. (See map.)

CHANGING ELIGIBILITY RULES. Twenty-three legislatures have increased age and service requirements for retirement for state employees, teachers or both in the past two years. In most states, the new rules apply only to people hired after the effective date of the legislation. Most of the changes move the age of retirement closer to 65 and increase the amount of service credits...