New Brunswick’s New Shared Risk Pension Plan
The brief’s key findings are:
- Under financial pressure, U.S. state and local pension plans have curbed future benefit costs. But these changes have been ad hoc and unexpected.
- New Brunswick’s new Shared Risk model is designed to respond to shocks in a more orderly and predictable way and to help head off trouble in advance.
- The model’s key features are:
- splitting benefits into “base” and “ancillary” components;
- laying out detailed steps in advance for adjusting benefits and contributions; and
- creating a risk management framework to help keep plans on track.