At the National Public Pension Coalition, we monitor pension legislation and news in states very closely. Earlier this week, NPPC Executive Director Kendal Killian and special guests discussed key legislative issues in 2025 during our Mid-Year Legislative Update webinar.
Did you miss the live webinar? Watch the replay here!
Key Takeaways
While 2025 sessions had pensions on offense more than defense in the state houses, that did not equate to an “easy” year. Lawmakers and pension advocates squared off in several state capitals, resulting in benefit improvements, fiscally responsible plan funding, and the preservation of defined benefit systems in battleground states.
- – “Public employees face a lot of growing uncertainty with federal job cuts, frozen aid from the federal government down to state governments,” Killian said. “These pressures have made retirement security more fragile for everyone and raised serious concerns even among current retirees.”
- – Public pensions are built for resilience, and their funding levels are rising. The average funding ratio of the top 100 state pension systems was 79% in 2023 and 81% in 2024. 80% is considered the benchmark for a healthy pension fund.
- – Public pensions are a value for states and provide peace of mind for workers and dignity for retirees. They support economic impact and growth, and save money by increasing employee retention.
- – Among the biggest threats facing pensions today are projected state budget shortcomings due to the loss of Federal funds and market instability.
State Spotlight: Colorado
Killian was joined by Karen Wick, Program Director for Secure PERA. Secure PERA is a coalition of labor advocates and union leaders who work closely with lawmakers and board members to protect and preserve the Colorado Public Employees’ Retirement Association (PERA).
This year, Colorado lawmakers passed several positive pension bills. 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. Senatete Bill 28, a risk reduction measure, established a law requiring regular reporting from the PERA board of trustees.
Colorado lawmakers also passed Senate Bill 310, which outlines the implementation of Proposition 130, a ballot measure approved by voters that requires the state to invest $350 million in recruiting, training, and retaining 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.
“Colorado is a big ballot initiative state. We have a lot of ballot initiatives that come from voters and from the people. One of the ones that we had this year, that passed last November, was some additional funding that would go to our police and those on the front lines, Proposition 130,” Wick detailed.
“So under Proposition 130, there needs to be about $35 million each year that goes to support our police across the state. There wasn’t really revenue within our state budget to be able to quickly pay that 35 million,” she added. “The budget makers and PERA got together to be able to figure out how to kind of prepay some of the annual contributions that the state is on the hook for, and we dropped a lump sum of $500 million into PERA to be able to invest, which should we get our annual rate of return, which is 7.25%.”
Wick added, “It definitely is some accounting that we’re going to have to be doing and really watching of it overall. But it’s another kind of creative mechanism.”
State Spotlight: Alaska
Also joining the webinar was Joelle Hall, President of the Alaska ALF-CIO. Hall, along with the other founding members of the Alaska Public Pension Coalition, has been instrumental in planning, organizing, and advocating for a return to pensions for Alaska’s public workforce. In 2025, the Alaska House of Representatives voted to pass House Bill 78 in the final days of the session, meaning it will start the second half of the session in the Senate Labor and Commerce Committee, where advocates will fight for its ultimate passage.
Discussing the pension system’s initial closure in 2005, Hall explained, “About that time, they discovered that our actuary not only had an error, but they then lied to the state of Alaska about the error and covered it up. So we had some malfeasance and malpractice, and we went from being 105% funded overnight to being 80% funded. And this was the first time our Senate ever confronted anything like that.” She went on to say, “There was just a huge overreaction. They end up taking the pension away in one year, after three special sessions, and by one vote. This was a very, very contentious thing when it happened. And ever since then, we’ve been trying to right the ship.”
Hall then commented on what to expect in 2026’s legislative session, saying, “Senate finance is kind of the tricky spot, because the architect of the DC system serves in Senate Finance. So it is going to take, like a Robert’s Rules Masons kind of maneuver to extract this bill from the committee. And, we will be waiting to do that. I expect it won’t be till the very end, but I expect we will pass both bodies by May of next year.”
Watch the webinar replay here!
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