The deficit will shrink because of such changes as eliminating cost-of-living increases, requiring employees to pay more and gradually increasing state payments, Pratt said.
"If we follow this, we will be 88 percent funded by 2041," Pratt said.
The changes weren't enough to forestall a downgrade by Fitch Ratings in August, to fourth-highest AA-. Fitch cited pressure from pension and employee-benefit deficits.
Economist Beaulier said that like Michigan, other states should convert to defined-contribution plans, even if they have to borrow to pay upfront costs. He said while traditional pensions may provide more security and benefits, young employees will have to pay too much to sustain them.
"It's a question of how comfortable do people need to be made in the retirement years?" Beaulier said.