Local officials in at least 10 states are trying to cut pensions of municipal workers, or eliminate defined-benefit plans, pointing to Detroit as a symbol of the peril of growing retirement costs.
From New York to California, mayors and county officials are asking legislatures, courts or voters to allow the changes as a way to maintain government services as pensions consume a larger portion of budgets. The pressure may help extend a rally in municipal debt of issuers such as cities and school districts after the securities trailed the $3.7 trillion municipal market for the past five years.
Elected officials are intensifying efforts to trim benefits even as local economies and tax revenue recover more than four years after the longest recession since the 1930s. They are searching for ways to reduce the costs of pensions that cover more than 14 million workers and are underfunded by at least $1 trillion, according to a January report by the Nelson A. Rockefeller Institute of Government in Albany, New York.