Welcome to the latest edition of This Week in Pensions! As National Retirement Security Month begins, new research highlights how pensions help retain experienced public workers. This week’s news also includes major funding progress for Indiana’s teacher pension fund, changes to NYPD retirement benefits, and a mixed legislative outcome for California firefighters. These are the stories you need to know in the fight for a secure retirement.
NPPC Highlight
Public Pension Crisis? This Report Offers a Fuller Picture
This week, we examined a measure often missing from pension debates: how pension obligations compare with the economic resources available to support them.
An analysis from the National Conference on Public Employee Retirement Systems finds that 45 states had pension obligations above their historical sustainability benchmarks in 2018. By 2024, that number had fallen to two. Across 48 states, obligations relative to personal income were at or below their own long-term averages.
Read our in-depth analysis to learn what these findings mean and why unfunded liabilities don’t tell the full story of public pension sustainability.
New From NIRS!
New Research Highlights Pensions’ Role in Retaining Public Workers
Public pensions help support the experienced workforce communities depend on, according to new research from the National Institute on Retirement Security, released October 1.
The report examines turnover assumptions from 136 state-administered public pension plans covering 12.8 million active members. It finds that employee departures are concentrated in the first five years of service. Among workers who reach that milestone, 53% are expected to remain through year 20 and 45% through year 30. Retention is generally higher in traditional defined benefit-only and hybrid-only plans than in several other plan types, although the researchers caution that these comparisons do not establish causation.
“The data show that once public employees move beyond the early-career period, they are significantly more likely to remain for the long term,” said NIRS Research Director Barbara Butrica.
For communities facing staffing shortages, keeping experienced teachers, firefighters, and other public employees should be a priority. Protecting pensions belongs at the center of that effort.
State News
Indiana’s Teacher Pension Fund Nears Full Funding a Decade Ahead of Schedule
Indiana’s pension fund for teachers hired before 1996 could reach full funding as soon as fiscal year 2028, roughly a decade earlier than previously expected, according to reports.
The progress follows $4.3 billion in supplemental state payments since 2018. Indiana Public Retirement System Executive Director Steve Russo told lawmakers that projections indicate a $160 million state payment in 2027 would bring the fund to 100% funded. That could eventually eliminate the need for approximately $1 billion in annual state appropriations.
Russo cautioned that investment performance could still require additional state support: “I don’t want to, in any way, portray that once we think we get this thing to 100% funded, and we make a payment that gets it there, that that means you’re done,” Russo told the pension oversight committee. “There’s risk going forward with this.” The fund covers approximately 52,000 retired teachers and 4,000 active teachers.
Indiana’s progress demonstrates what sustained funding can accomplish. Meeting pension obligations strengthens retirement security and improves long-term finances. Maintaining that progress requires continued oversight and a commitment to keeping promises to teachers.
New York Enacts Changes to NYPD Careers and Pension Calculations
Governor Kathy Hochul signed two laws September 28 affecting NYPD officers’ careers and retirement benefits.
Senate Bill 5053B raises the mandatory retirement age to 65, giving officers additional time to remain on the job if they choose.
A second law, Senate Bill 7808A, addresses a disparity in pension calculations within Tier 2. Eligible officers hired on or after July 1, 2000, who retire on or after the law’s effective date can have their salary base calculated using the greater of their final 12 months of pensionable earnings or their highest three consecutive years. Previously, their calculation relied only on the final 12 months.
The change brings those officers’ salary-base calculation into line with earlier Tier 2 hires. For affected workers, it can help ensure retirement benefits better reflect the earnings accumulated during their careers.
California Advances Firefighter Pay Negotiations While Rejecting Retirement Changes
California firefighters secured a step toward closing a longstanding compensation gap, but efforts to improve retirement options faced another setback.
Earlier this week, Governor Gavin Newsom signed a law requiring the next governor to “bargain in good faith” toward bringing Cal Fire compensation within 15% of the average at 20 California fire departments. A 2025 survey found Cal Fire compensation averaged approximately 27% below local departments. The law establishes a bargaining goal rather than guaranteeing an immediate raise.
Newsom also vetoed legislation that would have allowed Cal Fire firefighters and California Highway Patrol officers to redirect pension contributions during their final five career years into a CalPERS-managed investment account. That follows his rejection of broader public safety pension improvements covered in last week’s edition.
Public safety staffing depends on compensation that supports workers throughout their careers and into retirement. Progress on wages is welcome, but retirement security remains part of the challenge.
Be sure to check back next Friday for the latest news in the fight for a secure retirement! For daily updates, sign up for NPPC News Clips.