Unfunded Public Pension Liabilities and Local Citizen Oversight

2014 ◽  
Vol 29 (1) ◽  
pp. 23-39 ◽  
Author(s):  
Kevin T. Rich ◽  
Jean X. Zhang
Keyword(s):  
Citizen Participation ◽  
Local Governments ◽  
Pension Plans ◽  
Public Pension ◽  
Legislative Process ◽  
Defined Benefit ◽  
Municipal Governments ◽  
State And Local ◽  
Pension Liabilities ◽  
Jel Classifications

SYNOPSIS We examine whether unfunded public pension liabilities are associated with citizen oversight through legislative and electoral means in local governments. Our focus on municipal pension plans is timely and relevant, given the prevalence of underfunded pension plans and the GASB's recently issued statements on state and local pension reporting. Using a sample of 84 locally administered municipal defined benefit pension plans in 2009, we find evidence that the level of unfunded pension obligations is negatively associated with both provisions allowing direct citizen participation in the legislative process and electoral voter activism in the form of recent recall attempts. Overall, our empirical evidence is consistent with citizen oversight mechanisms playing an important role in the pension funding decisions of municipal governments. JEL Classifications: G34; H55; H72.

scholarly journals Worker Choices About Payouts in Public Pensions

2017 ◽  
Author(s):  
Robert L. Clark ◽  
Janet Raye Cowell
Keyword(s):  
Local Governments ◽  
Pension Plans ◽  
Policy Implications ◽  
Empirical Literature ◽  
Defined Benefit ◽  
Retirement Plans ◽  
The Public ◽  
State And Local ◽  
State Employees ◽  
State Pension

This chapter reviews available data on the annuity choices offered to retirees who participate in defined benefit (DB) plans. DB plans are most commonly offered by state and local governments to their employees, and information on annuity options is readily available. The authors examine all state pension plans that cover general state employees and teachers, and develop a table showing the similarities and differences across these approximately eighty separate state retirement plans. The authors determine the proportion of retirees selecting each of the annuity options. Where possible, annuity options in the public sector are compared to those offered by private sector employers. The chapter also reviews the empirical literature on who chooses the various annuity options offered in DB plans. Finally, the authors consider the policy implications of plan design and how this affects the types of annuities offered to retirees.

From Stand-Alone Pensions to Alternative Retirement Plans: Examining State and Local Governments

2021 ◽  
pp. 088636872110307
Author(s):  
Bruce J. Perlman ◽  
Christopher G. Reddick
Keyword(s):  
United States ◽  
Local Governments ◽  
Pension Reform ◽  
The United States ◽  
Pension Plans ◽  
Defined Benefit ◽  
Defined Contribution ◽  
Retirement Plans ◽  
Funded Pensions ◽  
State And Local

Defined benefit (DB) pension plans are the dominant retirement program for state and local governments in the United States. However, in the last 15 years, some have given new employees a choice of alternatives to stand-alone DB pension plans such as cash balance (CB), defined contribution (DC), and hybrid retirement plans. This article examines this shift through survival analysis using panel data of 190 state and local pension plans across the United States. From 2001 to 2019, we modeled five change factors found in the pension reform literature, namely, financial constraints, interest group influence, plan membership, and liability, along with other state factors. Our analysis shows that all five of these factors impacted the shift to alternative retirement plans from stand-alone DB plans. Notable findings are that well-funded pensions were more likely to shift to alternative retirement plans, and interest groups such as police, fire, and teachers were more likely to keep stand-alone plans.

Labor market aspects of state and local retirement plans: a review of evidence and a blueprint for future research

2011 ◽  
Vol 10 (2) ◽  
pp. 337-361 ◽  
Author(s):  
LEORA FRIEDBERG
Keyword(s):  
Labor Market ◽  
Local Governments ◽  
Pension Plans ◽  
Future Research ◽  
Defined Benefit ◽  
Retirement Plans ◽  
Public And Private ◽  
State And Local ◽  
State Pension ◽  
Government Workers

AbstractTraditional defined benefit (DB) pension plans remain the overwhelming norm for teachers, policemen and other employees of state and local governments. The incentives for workers with DB pension plans to stay in their jobs shift dramatically over the course of their careers. Moreover, limited transferability of pension wealth across states and between public and private jobs impedes mobility in the labor market. Yet, little is known about the labor market effects of pensions on state and local government workers. The literature on private-employer pensions has made contributions on some of these fronts in recent years that can shed light on policy concerns raised by the possibility that pension plans will be modified in coming years. Moreover, some of the limitations constraining research on pensions may be overcome by focusing on government workers, with recent work on public school teachers pointing the way. Very recent studies are finding strong retirement responses to age- and tenure-related incentives built into state pension plans.

Alternative investments: is it a solution to the funding shortage of US public pension plans?

2019 ◽  
Vol 19 (4) ◽  
pp. 491-510 ◽  
Author(s):  
Jun Peng ◽  
Qiushi Wang
Keyword(s):  
Local Governments ◽  
Private Equity ◽  
Pension Plans ◽  
Public Pension ◽  
Investment Performance ◽  
Alternative Investments ◽  
Investment Return ◽  
State And Local ◽  
Public Pension Plans ◽  
The Impact

AbstractSince 2001, public-pension plans have increasingly relied upon alternative investments (AIs). We examine the impact of this trend on investment performance and the factors that led to the reliance on AI. Using data from 92 largest plans 2001–2014, we found AI, especially private equity, generally had a positive effect on investment performance, but the effect was small and unsustainable. We also found that plans with a lower funded ratio and higher investment return expectation were more likely to allocate more assets to AIs. These findings suggest that the prospect of relying on AIs to meet investment return expectations remains a long-term challenge for state and local governments.

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.

Benchmarking Local E-Government

2011 ◽  
pp. 371-378 ◽  
Author(s):  
Tan Yigitcanlar ◽  
Scott Baum
Keyword(s):  
Citizen Participation ◽  
Local Governments ◽  
Business Processes ◽  
The Internet ◽  
Daily Lives ◽  
Four Dimensions ◽  
Government Services ◽  
Government Project ◽  
Governance Tools ◽  
State And Local

Increasingly, almost everything we do in our daily lives is being influenced by information and communications technologies (ICTs) including the Internet. The task of governance is no exception with an increasing number of national, state, and local governments utilizing ICTs to support government operations, engage citizens, and provide government services. As with other things, the process of governance is now being prefixed with an “e”. E-governance can range from simple Web sites that convey basic information to complex sites that transform the customary ways of delivering all sorts of government services. In this respect local e-government is the form of e-governance that specifically focuses on the online delivery of suitable local services by local authorities. In practice local e-government reflects four dimensions, each one dealing with the functions of government itself. The four are: (a) e-services, the electronic delivery of government information, programs, and services often over the Internet; (b) e-management, the use of information technology to improve the management of government. This might range from streamlining business processes to improving the flow of information within government departments; (c) e-democracy the use of electronic communication vehicles, such as e-mail and the Internet, to increase citizen participation in the public decision-making process; (d) e-commerce, the exchange of money for goods and services over the Internet which might include citizens paying taxes and utility bills, renewing vehicle registrations, and paying for recreation programs, or government buying office supplies and auctioning surplus equipment (Cook, LaVigne, Pagano, Dawes, & Pardo, 2002). Commensurate with the rapid increase in the process of developing e-governance tools, there has been an increased interest in benchmarking the process of local e-governance. This benchmarking, which includes the processes involved in e-governance as well as the extent of e-governance adoption or take-up is important as it allows for improved processes and enables government agencies to move towards world best practice. It is within this context that this article discusses benchmarking local e-government. It brings together a number of discussions regarding the significance of benchmarking, best practices and actions for local e-government, and key elements of a successful local e-government project.

Local Governments

2021 ◽  
pp. 303-328
Author(s):  
Jeffrey S. Sutton
Keyword(s):  
Rural Areas ◽  
Local Governments ◽  
Separation Of Powers ◽  
Home Rule ◽  
Municipal Governments ◽  
Division Of Powers ◽  
The Us ◽  
One Step ◽  
Us Constitution ◽  
State And Local

The US Constitution never mentions “city,” “county,” or “township,” not even “local” or “municipal” governments. It concerns itself only with sovereign entities. Because local governments “cannot claim to be sovereigns” and because whatever power a local government has tends to flow from its state, that sounds like the end of the matter. But local governments still exercise sovereign powers, including law enforcement, eminent domain, education, taxing, zoning, and other indispensable “attributes of sovereignty.” Even if the US Constitution does not mention cities by name and even if cities cannot claim sovereign status, the federal charter still has ample consequences for municipal governments. This chapter takes vertical separation of powers one step further, to federalism within federalism. It explains the division of powers between state and local governments and chronicles disputes that have arisen between them. If, in modern America, like-minded people increasingly gravitate to similar states, the same is true within states, whether in cities, suburbs, or rural areas. Home rule and other local allocations of power sometimes allow people in these communities to express their distinct political preferences and live under them, too.

Retirement and Pensions in American Economic History

2018 ◽  
pp. 354-374
Author(s):  
Robert Clark ◽  
Lee A. Craig
Keyword(s):  
Public Sector ◽  
Private Sector ◽  
Economic History ◽  
Pension Plans ◽  
Federal State ◽  
Defined Benefit ◽  
Retirement Plans ◽  
The Us ◽  
Defined Benefit Plans ◽  
State And Local

The proportion of the US population that survives to retirement age has increased over time, as has the share of the older population that retires. Higher incomes at older ages explain the increase in the incidence of retirement. Pensions provide much of that income. In general, public-sector workers, especially military personnel, were covered by pensions before their private-sector counterparts, and coverage in the public sector remains more widespread, and generous, than it is in the private sector. Public-sector pension plans are more likely to be defined benefit plans than are private-sector plans. Many public-sector employers have promised their employees more in benefits than they have set aside to pay for those benefits. Estimates suggest that the federal, state, and local retirement plans currently in operation are underfunded by as much as $5 trillion.

Benchmarking Local E-Government

2011 ◽  
pp. 37-42 ◽  
Author(s):  
Tan Yigitcanlar ◽  
Scott Baum
Keyword(s):  
Citizen Participation ◽  
Local Governments ◽  
Business Processes ◽  
The Internet ◽  
Daily Lives ◽  
Four Dimensions ◽  
Government Services ◽  
Government Project ◽  
Governance Tools ◽  
State And Local

Increasingly, almost everything we do in our daily lives is being influenced by information and communications technologies (ICTs) including the Internet. The task of governance is no exception with an increasing number of national, state, and local governments utilizing ICTs to support government operations, engage citizens, and provide government services. As with other things, the process of governance is now being prefixed with an “e”. E-governance can range from simple Web sites that convey basic information to complex sites that transform the customary ways of delivering all sorts of government services. In this respect local e-government is the form of e-governance that specifically focuses on the online delivery of suitable local services by local authorities. In practice local e-government reflects four dimensions, each one dealing with the functions of government itself. The four are: (a) e-services, the electronic delivery of government information, programs, and services often over the Internet; (b) e-management, the use of information technology to improve the management of government. This might range from streamlining business processes to improving the flow of information within government departments; (c) e-democracy the use of electronic communication vehicles, such as e-mail and the Internet, to increase citizen participation in the public decision-making process; (d) e-commerce, the exchange of money for goods and services over the Internet which might include citizens paying taxes and utility bills, renewing vehicle registrations, and paying for recreation programs, or government buying office supplies and auctioning surplus equipment (Cook, LaVigne, Pagano, Dawes, & Pardo, 2002). Commensurate with the rapid increase in the process of developing e-governance tools, there has been an increased interest in benchmarking the process of local e-governance. This benchmarking, which includes the processes involved in e-governance as well as the extent of e-governance adoption or take-up is important as it allows for improved processes and enables government agencies to move towards world best practice. It is within this context that this article discusses benchmarking local e-government. It brings together a number of discussions regarding the significance of benchmarking, best practices and actions for local e-government, and key elements of a successful local e-government project.

E-Governance vs. E-Readiness in Urban Municipal Governments in Tamil Nadu, India

2011 ◽  
pp. 1-23
Author(s):  
Abdul Razak Mohamed
Keyword(s):  
Local Governments ◽  
Tamil Nadu ◽  
World Order ◽  
Governance System ◽  
Central State ◽  
Municipal Governments ◽  
Service Delivery Systems ◽  
State And Local ◽  
The Government ◽  
Planning Development

The fast growing information and communication technology (ICT) sector brought in the use of computers, internet and mobile phones not only by the technocrats but also by the general public to receive and send communication faster, cheaper and easier. This situation brought out visible changes in people life, government function and cities spatial form and structure. Globally, the e-Governance system approach attempts to change the government-centered planning and delivery of civic services to people-centered planning and execution of development. It is also evident that the transformation is prominent not only in the planning and production of services but also in terms of urban local government system. This is to state that there are two noticeable visible changes in the government system such as (a) Government to Governance, and (b) Governance to e-Governance. These changes make the central, state and local governments more responsible, transparent, and participatory in terms of planning, development and management of towns and cities. But due to the urgency and cope with the World order the central, state and local governments in India introduce e-Governance without looking into the concept of e-Readiness. This chapter attempts to explore the basic question such as how the application of e-Governance system to be considered as an important means towards improvement in the service delivery systems of urban local governments within the perspective of e-Readiness.

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