Currently, state and local governments have to set aside funds for retiree benefits and these funds are invested in low-yielding fixed-income investments. But despite warnings that by rejecting the amendments voters may have to pay higher taxes, more than 55 percent of voters defeated the measures.

In a letter Tuesday, November 4, to the editor in The Post and Courier in Charleston, South Carolina, Mayor Joseph Riley stated that voting in favor of Amendment 3, the local government amendment, would result in “tremendous savings to taxpayers.”

However, the mayor’s pleas were unheeded.

“In the current environment, a lot of people are scared stiff,” said Joe Hessenthaler, a principal at Towers Perrin. “They would rather take a fixed return of 2 percent even if it will cost them more.”

Overall, the public has become much more attuned to the risks associated with returns, said Cecil Hemingway, executive vice president and head of the U.S. retirement practice at Aon Consulting.

But just because the public is risk-averse today doesn’t mean these amendments won’t pass if they are brought to vote again in a few years, Hemingway said.

“We will all forget and then create another bubble and then remember about risk,” he said. “It’s human nature.”