Public pension plans have long been assumed to be safer than their private counterparts. But the reduction, suspension or elimination of cost-of-living adjustments in 17 states proves there are no guarantees in retirement income, according to a brief issued by the Center for Retirement Research at Boston College.
Public pension plans at the state and local level fall outside ERISA's domain, but are often protected by laws that constrain the ability to change benefits, including COLAs.
Yet as the recession exposed systemic underfunding in public pensions, the center said some states cut COLAs not only for current workers, but also for current retirees.
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