Looking back at 2025: A year of change for public pensions

In the summer, we shared our mid-year review Heywood. At that point we were seeing early signs that the public pension landscape in North America was shifting. Six months later those signs have become defining themes. Reform accelerated, digital expectations rose, vendor accountability tightened and member engagement moved to center stage. What began as gentle movement became clear momentum by the end of the year.

Here is what defined 2025 and what will shape 2026.

Reform in public pensions became real

When WEP and GPO were repealed early in the year, the impact was immediate. For millions of teachers, firefighters, police officers and municipal workers this meant fuller Social Security benefits and, in many cases, hundreds of extra dollars each month.

For pension systems it triggered an operational shift that is still unfolding. The reforms tested the agility of every pension system, exposing which platforms were ready for rapid change and which ones were held back by siloed data and manual processes.

Reform brought responsibility. The plans that adapted with clarity and speed strengthened trust. Those that struggled have a clear case for modernization in 2026.

In June, we were joined by leaders in the North American market to discuss pension plan modernization.

Digitization moved from ambition to expectation

What began as an emerging trend mid-year became undeniable by year end. Members now expect their pension plan to deliver the same clarity and convenience they receive in banking, healthcare and retail.

Real time estimates, digital document submission and mobile first self service are quickly becoming baseline expectations. Some plans made impressive progress in 2025, others are now needing to catch up. The gap between digitally enabled systems and legacy bound systems widened this year and will widen further if action is delayed.

And momentum is building

We are already aware of more than a dozen plans preparing to launch and discuss full modernization projects in 2026. For many, the urgency is clear. The cost of delay is becoming harder to justify and confidence in replacing legacy systems is increasing across the sector.

Accountability is rising in the vendor marketplace

Another theme that intensified in late 2025 was the rising level of scrutiny on pension technology providers. Several high profile modernization projects ran into serious difficulty and some vendors now face impending court proceedings related to failed or incomplete implementations.

These challenges brought a simple truth into focus. Public pension plans cannot afford long, expensive projects that stall or underdeliver. Boards are asking tougher questions and want clearer evidence of delivery capability, transparency and long term partnerships. This shift is reshaping procurement and creating stronger demand for platforms that are proven, dependable and genuinely ready for the complexity of public sector administration.

Personalization remained the missing piece

Throughout 2025 one message kept resurfacing. Members want clarity. They want relevance. They want communication that feels designed for them as individuals. They want a system that does everything, benefit calculations, retirement processing at the click of a button and real time communication with administration teams.

Yet many plans continued to rely on generic statements, static documents and one size fits all messaging. The appetite for personalized tools, including video, targeted content and member specific projections, grew steadily this year. But reluctance to change often stalled progress.

Personalization is now one of the strongest levers for trust, engagement and long term member outcomes.

Or article on how self-service tools are helping to re-shape retirement administration shares more on the role of personalization in greater detail.

A year of momentum and opportunity

The first half of 2025 set change in motion. The second half confirmed that the sector is ready for more confident modernization. Plans that invested in better systems, clearer digital journeys and stronger communication capability are already seeing meaningful results.

At Heywood we are proud to support public retirement systems across the UK and North America as they modernize their administration, improve member experience and respond to policy and regulatory change. This year reinforced how important scalable, efficient and people centered technology has become.

2025 was a year of progress.

2026 will be a year for building on it with clarity, confidence and purpose as the modernization journey begins for many.