• Pension spending increased in all of the 10 largest American cities over the last decade, with a few cities experiencing a doubling or even tripling of their expenditures in 2021 dollars.

• Almost all cities saw an increase in pension spending per employee.

• There is large variation in the amount per employee that American cities are spending on pensions.

• To respond to rising pension demands, some cities have reduced employment, often in the area of public safety.

• A worsening market environment for pension funds will necessitate increased pension expenditures by cities in 2023 and beyond, exacerbating pressures to limit or reduce employment and, thus, city services.

To avoid the vicious cycle of deteriorating urban conditions spurring more outmigration, cities need to consider a host of policy options. We recommend the following: 1. Petition state governments to change pension statutes to allow for defined-contribution options for new hires.

2. Alter existing pension formulas for new hires to require more years before a full pension can be earned.

3. Identify ways to improve service efficiency without investing in greater human capital.