As legislatures across the country pack up and head home for the summer, we reflect on how pensions fared in the 2025 state sessions. National headlines touted sweeping federal job cuts and frozen federal aid funds, but did that affect state pensions? Here is a recap of what happened with the legislative actions we monitored this year:
Alaska
Following years of planning, organizing, and advocating for a return to pensions, the Alaska House of Representatives voted to pass House Bill 78 in the final days of the 2025 session, putting public employees in the 49th state closer than ever to restoring retirement security. Chronic understaffing in public agencies across the state spurred the pension restoration effort.
Win: House Bill 78, which originated in the House Finance Committee, will establish a new defined benefit retirement system for public employees—a system that would offer greater financial security and stability than the current defined contribution model. Once enacted, it will provide both new and current employees a choice between a pension or a 401(k). NPPC and the Alaska Public Pension Coalition are working hard to prepare for the battle to pass HB 78 next year. The bill will begin the 2026 legislative session in the Senate Labor and Commerce Committee.
Arizona
Despite previous attempts to weaken the Arizona State Retirement System (ASRS), the 2025 session in Phoenix was relatively quiet in terms of pension attacks. Budget battles stymied the state legislature for weeks, providing a preview of what’s to come in the future, as many state budgets in 2026 are expected to run tighter without federal aid. Ensuring that ASRS investment strategies are based on pecuniary prudence and not political agendas remained the coalition’s primary focus this year.
Win: Several bills regarding risky investments in Bitcoin and cryptocurrency made it to the governor’s desk in Arizona, only to be ultimately vetoed. Governor Hobbs struck down Senate Bills 1025, 1024, and 1373 after successful advocacy by the Arizona Retirement Security Coalition. Hobbs noted, “Arizonans’ retirement funds are not the place for the state to try untested investments like virtual currency.”
Arkansas
Expansion of pension benefits to vital public employees is key to recruiting and retaining quality staff, especially in the public school system. Lawmakers in Arkansas made positive steps toward filling their schools with top-notch teachers this year by including more positions in the Arkansas Teacher Retirement System (ATRS).
Win: Act 587 will allow eligible early childhood educators to opt into ATRS, including teachers working in publicly funded programs, such as daycare and public preschool teachers. This new law shows that lawmakers value the contributions of early childhood educators, as their benefits more closely resemble those available to their counterparts in higher grades.
Colorado
The Colorado state legislature addressed several fiscal integrity issues this year relating to pensions this year, including the establishment of a protocol of transparency and accountability in the Colorado Public Employees’ Retirement Association (PERA).
Win: Senate Bill 147, often referred to as a “transparency bill”, dictates several changes to PERA, including trustee term limits and requiring public disclosure of certain financial information on an annual basis. This is a big win for public employees in Colorado.
Win: Senate Bill 28, the Public Employees’ Retirement Association Risk Reduction Measures, establishes a law requiring specific reporting by the PERA Board of Trustees regularly. These reports, which PERA currently voluntarily discloses, include actuarial experience studies and independent reviews through actuarial audits.
Win: Senate Bill 310 dictates the implementation of Proposition 130, a ballot measure passed by voters, which requires the state to invest $350 million to recruit, train, and retain local public safety officers. The bill will be funded by providing PERA with a $500 million lump-sum payment, and reducing future direct distributions to PERA based on the investment earnings generated from those funds. The bill is expected to be a net positive, allowing PERA to allocate the $500 million in a way that reduces the likelihood of triggering a future Automatic Adjustment Provision.
Connecticut
Thanks to the strict budget caps set in 2017, Connecticut lawmakers have made remarkable progress in paying down the legacy pension debt caused by past years of mismanagement. Since 2020, $8.6 billion has been allocated toward reducing the state’s unfunded liability. However, these fiscal guardrails were the focus of intense budget negotiations in 2025 as fears over federal cuts and the termination of COVID-19 funds stirred on both sides of the aisle.
Win: Senate Bill 24 would have prevented overtime payments from being factored into the final calculation of retirement income for state employees, effectively depriving workers who are often forced into overtime due to staffing shortages of retirement funds they have earned. Enormous turnout at the public hearing and pressure from the coalition effectively killed this bill.
Win: House Bill 6953 would have compelled municipalities with a certain number of full-time employees to offer police and firefighter pensions through the Connecticut Municipal Employees Retirement System (CMERS). This bill now heads to the Comptroller’s office for an interim study.
Loss: House Bill 7010 would have provided paraeducators with several improved benefits, including access to the state pension system. This bill did not advance out of the House Finance Committee.
Kansas
Following an interim study in 2023 that determined the Kansas Public Employees Retirement System (KPERS) Tier 3 falls behind that of neighboring states’ pension benefits, lawmakers in Kansas have been making slow but steady progress toward improvements.
Win: House Bill 2086 was the first attempt to address the inequities exposed by the 2023 interim study. It proposed adjusting the KPERS 3 dividend interest credit by lowering the dividend interest credit threshold to 5% and increasing the dividend share to 80%. After passing the House 116 to 5, it did not advance past the Senate Financial Institutions and Insurance. However, the bill is slated to undergo additional studies during the interim period and will be eligible for further consideration in the 2026 session.
Win: Senate Bill 64 is a technical bill that makes adjustments to certain KPERS statutory references, extends the time for filing administrative appeals, and updates provisions relating to compliance with the federal Internal Revenue Code.
Threat: Kansas public employees are no strangers to the threat of transitioning to a defined-contribution system. This year, Senate Bill 282, from long-time pension opponent Senator Caryn Tyson, proposed replacing the state pension with a 401(k)-style offering dubbed the Kansas Retirement Investment and Savings plan (KRISP). The bill did not advance beyond a hearing in the Senate Financial Institutions and Insurance Committee, but may recieve an interim study.
Kentucky
The Bluegrass State had a quiet session this year in terms of pensions, but the state’s budget future could be in jeopardy as income tax cuts continue to slash state revenue.
Win: House Bill 441, regarding reemployment after retirement in the Teachers’ Retirement System, aims to ease the continuing educator shortage by increasing the percentage of retired members that a school district can employ full-time, and by increasing the number of retired members that a local school district may employ under the critical shortage provision. The governor signed this bill with ample support from state union leaders.
Win: Senate Bill 9 was introduced to help mitigate costs to the pension system without negatively impacting teachers by limiting the amount of sick leave that can be counted toward pension calculations to 13 days per year while preserving previously accrued benefits. This bill was designed in part to address the disparity in how sick leave and retirement benefits are calculated for teachers compared to school administrators, as teachers were previously limited to banking only 10 sick days, while some administrators could bank up to 60 days. In addition, transparency measures were written into the bill to increase reporting requirements.
Loss: House Bill 76 would have changed the retirement benefits for workers participating in the State Police Retirement System (SPRS) or in a hazardous position in either the Kentucky Employees Retirement System (KERS) or County Employees Retirement System (CERS) from the KPERS Tier 3 hybrid cash balance plan to KPERS Tier 2. This bill stalled in the House State Government Committee.
Potential Threat: House Bill 1 lowered the Kentucky state income tax from 4% to 3.5%, a continuation of the efforts originated by the General Assembly in 2022 to gradually reduce the income tax until it reaches zero. While this move was touted as a cost-saving measure for taxpayers, reducing state revenues could undermine the state’s ability to provide proper pension funding in the future.
Michigan
The 2024 elections ended Michigan’s Democratic trifecta and prompted a lame duck session in the last 2 months of the year. During that time period, lawmakers worked to move positive pension legislation forward–but they met unexpected challenges.
Win–in limbo: House Bills 4655, 4666, and 4667 would add correctional officers and conservation officers to the same hybrid pension plan currently offered to Michigan State Police–however, they are three of the nine bills that were passed in 2024’s legislative session which curiously never made it to the Governor’s desk for signing. Corrections officers rallied earlier this month to demand the bills’ enactment into law, but they remain in limbo.
Minnesota
Minnesota’s public workforce has seen some turmoil surrounding retirement benefits–the state ranks 46th in the nation in per capita spending on public employee pensions, dedicating 2.4% of state and local revenues to pensions, less than the national average of 5.2%.
Win: Following a strong grassroots push, Minnesota lawmakers passed HF 1889/SF 2884, an omnibus pension bill that reduces the retirement age and lessens early retirement penalties for teachers, granting current teachers benefits that mirror those of their predecessors, with an unreduced pension benefit upon reaching age 60 with 30 years of service. The bill also provides a one-time 3% cost-of-living increase in 2026 and 1% annually thereafter for PERA police and firefighter members. Additionally, state patrol retirees will get a 1.25% annual cost-of-living increase.
New Hampshire
In 2024, public safety officers in New Hampshire filed a class action lawsuit against the state, arguing that changes to the pension system in 2011 were unconstitutional, and aimed to win back benefits for the New Hampshire Retirement System Group II employees with less than 10 years of service as of 2012.
Win: In February, Governor Kelly Ayotte dedicated $33 million of the 2026 state budget to “overhauling” the Group II tier, which supporters say will aid in the recruitment and retention of police, firefighters, EMTS and other first responders. “It’s the right thing to do for those that do so much to keep us safe,” Ayotte said. “This is only the beginning, but it is a big step forward in ensuring they receive the retirement they have earned.”
Oklahoma
Oklahomans fought to preserve their pension benefits this year, while promised improvements hang in the balance. Advocates in Oklahoma also successfully stopped legislation that would have negatively impacted public employees.
Win: Senate Bill 1029 would have allow public employees to opt out of participation in the defined contribution system with no penalty. Due to the effective advocacy of Keep Oklahoma’s Promise, this bill, which would have been disastrous for public employees and the state pension systems, did not advance out of committee.
Win: House Bill 1258 proposed a defined-contribution choice for educators in Oklahoma. In addition, the measure aimed to incentivize teachers to switch to a 401(k) by offering a higher pay scale to those who opted out of the pension system. This bill did not advance past its first hearing in the House Committee on Banking, Financial Services and Pensions.
Win: House Bill 1561, known as the Foreign Divestment Act; was not heard in the Senate after several members of the coalition met with the bill author Senator Hines, who indicated he will not have it heard because there were “too many problems with the bill.” Similarly, Senate Bill 568, which aimed to politicize pension funding through proxy votes further, was not heard or considered in the House.
Wyoming
The Wyoming state legislature also had a short session this year, but that didn’t stop potential threats from coming after the Wyoming Retirement System (WRS).
Win: House Bill 80, known as the Stop ESG Act, could have cost the WRS $1.2 billion over three years. The Wyoming Coalition for Healthy Retirement testified against the bill and its potential negative impact on the system, and HB 80 was ultimately amended to minimize potential damage. This bill passed the House but died in the Senate, thanks in large part to the mobilization of the members of the WCHR.
Win: State Funds 191, regarding Proxy Voting and Pecuniary Investments, was a clear indication that the Legislature still wanted to make a statement about opposing ESG. Demanding that “investment policy statements shall include the requirements for investments to be made based on only pecuniary factors,” this bill ultimately appeased the legislators’ desire to have some anti-ESG legislation while still prioritizing fiduciary responsibility.
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