The SAFE Act proposes reforms to both public and private sector plans. Johnson said the Urban Institute only graded the aspect of the bill that relates to public plans. 

In that area, Johnson says Hatch's reforms are the best the Urban Institute has seen so far. 

"Sen. Hatch's plan is one of the few that addresses multiple core problems," he said. "For starters, it addresses the financing issues because it doesn't allow pensions to underfund annual contributions." 

That's because Hatch's plan would require pensions to make annual purchases of annuities on behalf of every plan enrollee. Contributions aren't made to a general fund; they are used to purchase annuities, every year. 

"Unlike an investment committee or a union, which can decide how much to contribute to the fund each year, the purchase of an annuity guarantees a contribution rate," said Johnson. 

Hatch's plan also provides a more equitable distribution of benefits across participants' age demographics. 

Under current design, public plan benefit distributions are uneven. They encourage early retirement after a certain number of years of service by limiting benefit accruals to a plan's oldest workers, and they provide too little of a benefit to younger workers, according to Johnson. 

Demographic realities have left the supply of younger workers stagnate. Johnson says the Urban Institute's research shows that the 62-69 demographic will grow 28 percent over the next 10 years, while the 22-61 group will only grow 2 percent in that time. 

"State and local employers need to hang on to their older workers, not encourage them to retire. Older workers are going to become more important to the workforce, in both the public- and private-sector," said Johnson. 

As is, younger workers who may leave the public sector after 10 years are victims of impractical pension funding that effectively freezes their pension assets until they retire. 

Hatch's idea to keep purchasing annual annuities with each worker's pension assets means that the pension investments of a 35-year-old can keep growing until they retire and are eligible to claim the benefits. 

"As is, you leave the public sector and your earned benefit is frozen. But why not let that money work for the worker? It could have several decades to grow. Sen. Hatch's plan effectively unfreezes the benefit," Johnson said. 

And that could help attract younger talent, something state and local governments are struggling to do. 

The Urban Institute announced its score of the SAFE Act before a panel on Capital Hill this week. Sen. Hatch was present. 

"Some have called my bill a 'solution in search of a problem.' Yet nothing could be further from the truth," he said.