Corryn Hall

Pension legislation signed into law by Minnesota Governor Tim Walz (D) in May includes important provisions that will help the state better assess what would be needed to adequately fund promised pension benefits. Under the new law, state officials will use an approach called layered amortization to estimate the annual governmental contributions needed to pay down unfunded public retirement system liabilities.

Recent economic trends show the value of stress testing to manage uncertainty Article May 16, 2024 By: Stephanie Connolly & Corryn Hall Read time: Share Pension Risk Reporting Guidance Updated to Include Inflation Scenario Jasmin Merdan Getty Images The number of states that conduct forward-looking assessments of investment risk on funding levels and costs for their state pension systems has grown significantly over the past decade from just seven states in 2012 to 25 today.

As many states enter budget negotiations for next fiscal year with anticipated surpluses, policymakers must ask two critical questions: Is their state sufficiently prepared for unexpected events such as a recession or natural disaster? And, critically, is the current surplus temporary or structural? State leaders should routinely consider the first question, but the high uncertainty surrounding the economy makes it particularly salient now.