Police and Fire Pensions in Florida: A Comparison of Conditions After 10 Years

2021 ◽  
pp. 088636872199913
Author(s):  
Joseph Vonasek ◽  
Robert Lee
Keyword(s):  
Pension Plans ◽  
State Funding ◽  
Overwhelming Majority ◽  
Defined Benefit ◽  
State Mandates ◽  
Fiscal Health ◽  
Fiscal Impact ◽  
Financial Condition ◽  
Economic Trends ◽  
Similar Assessment

This article is an analysis of 31 defined benefit police and fire pension plans of 20 municipalities in Florida. The authors conducted a similar assessment of these same plans ten years earlier to determine the fiscal impact of these plans due to state mandates that accompany state funding for each of these plans. The current study analyzes key measures of fiscal health over the last ten years for these same plans to ascertain whether the fiscal condition of these plans remained constant, that is, whether underfunded plans continued to be questionably managed and whether well-funded plans continued to be fiscally stable considering economic trends and the lessening of state mandates on the use of state funding for these plans. The findings show that the overwhelming majority of the plans neither significantly changed their financial condition nor their general ranking among the plans evaluated.

Optimal ALM strategies for defined benefit pension plans

2000 ◽  
Vol 2 (2) ◽  
pp. 47-69 ◽  
Author(s):  
Arun Muralidhar ◽  
Ronald van der Wouden
Keyword(s):  
Pension Plans ◽  
Defined Benefit ◽  
Defined Benefit Pension Plans

Measuring Pension Liabilities under GASB Statement No. 68

2014 ◽  
Vol 28 (3) ◽  
pp. 421-454 ◽  
Author(s):  
John W. Mortimer ◽  
Linda R. Henderson
Keyword(s):  
Financial Reporting ◽  
Risk Index ◽  
Pension Plans ◽  
Low Risk ◽  
Sensitivity Analyses ◽  
Fiscal Year ◽  
Defined Benefit ◽  
Discount Rates ◽  
Risk Rate ◽  
Pension Liabilities

SYNOPSIS While retired government employees clearly depend on public sector defined benefit pension funds, these plans also contribute significantly to U.S. state and national economies. Growing public concern about the funding adequacy of these plans, hard hit by the great recession, raises questions about their future viability. After several years of study, the Governmental Accounting Standards Board (GASB) approved two new standards, GASB 67 and 68, with the goal of substantially improving the accounting for and transparency of financial reporting of state/municipal public employee defined benefit pension plans. GASB 68, the focus of this paper, requires state/municipal governments to calculate and report a net pension liability based on a single discount rate that combines the rate of return on funded plan assets with a low-risk index rate on the unfunded portion of the liability. This paper illustrates the calculation of estimates for GASB 68 reportable net pension liabilities, funded ratios, and single discount rates for 48 fiscal year state employee defined benefit plans by using an innovative valuation model and readily available data. The results show statistically significant increases in reportable net pension liabilities and decreases in the estimated hypothetical GASB 68 funded ratios and single discount rates. Our sensitivity analyses examine the effect of changes in the low-risk rate and time period on these results. We find that reported discount rates of weaker plans approach the low-risk rate, resulting in higher pension liabilities and creating policy incentives to increase risky assets in pension portfolios.

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