Articles | October 20, 2022

The Impact of Inflation on Public Pensions

State and local governments and public pension systems are interested in how today’s high inflation might affect their DB plans.

This article addresses the likely impact on:

  • Cost-of-living adjustments (COLAs)
  • Salaries
  • Investment return
  • Demographics

Get the Article

Serious Businessman Explaining Principles Of Work To His Colleagues At Meeting Download Now

The article, which was published in the Fall 2022 issue of PERSist, the newsletter of National Conference on Public Employee Retirement Systems (NCPERS), can be downloaded here with permission from NCPERS.

What’s the bottom line?

Except for some COLA designs and potential investment impacts, periods of high inflation generally do not have a direct, immediate impact on public pensions.

Typically, the effect is delayed and is based on other factors related to inflation; and may not have as great an impact on plan costs as the prices of goods and services.

To understand the potential impact, plan sponsors and their actuaries could thoughtfully model projection scenarios where these factors are considered.

Interested in assessing the impact of inflation on your jurisdiction’s DB plan?

We can help.

Get in Touch

See more insights

Senior Man Contemplating At Home

IRS Provides Relief for Certain 2021 and 2022 RMDs

Learn more about the relief and how it can affect your plans.
Serious Elderly Senior Grandparents Couple Reviewing Finance Documents

Are You Ready for the New W-4P and W-4R Forms?

Watch our informative discussion on the IRS’s redesigned pension tax-withholding forms.
Young Businessman Sitting Alone In The Office With His Hands Behind His Head In Relief

IRS Extends Time to Amend Retirement Plans

Learn more about the extension and how it affects your plans.

This page is for informational purposes only and does not constitute legal, tax or investment advice. You are encouraged to discuss the issues raised here with your legal, tax and other advisors before determining how the issues apply to your specific situations.

Don't miss out. Join 16,000 others who already get the latest insights from Segal.