Detroit's recent high-profile trip to bankruptcy court—allowing it to break decades of costly pension promises—has prompted other city officials to blame "legacy" retiree benefit costs for their dire financial conditions.
But pension costs have played only a minor role in the current financial plight of the dozens of U.S. cities that find themselves unable to make ends meet, according to a report Tuesday from the Center for Retirement Research. Most of the damage was done by the collapse in revenues from the Great Recession—and bad budget decisions by local officials, the Boston College researchers found.