Causes and Ramifications of Public Pension Fund Underfunding

2018 ◽  
pp. 114-146
Author(s):  
Joyce Miller
Keyword(s):  
New Jersey ◽  
Capital Markets ◽  
Local Governments ◽  
Public Pension ◽  
Current Crisis ◽  
Pension Systems ◽  
Retirement Security ◽  
Public Pension Fund ◽  
State And Local ◽  
Primary Focus

The problem of public pension plan underfunding has grown increasingly acute in recent years for numerous states and cities including Illinois, New Jersey, Connecticut, Charleston, Chicago and Philadelphia. Underfunded pension systems have profound implications for state and local governments' ability to provide basic services to their citizens and calls into question the retirement security of their public employees. The history of the severely underfunded New Jersey pension funds will be examined in order to understand how the current crisis developed. Economic and demographic changes, conditions in the capital markets, political and budgetary priorities and pressures, and actuarial conventions will be examined in order to highlight how the crisis is the result of the complex interaction of social, political and economic forces. The primary focus will be on how the capital markets influence the funding levels of pension systems and the options for government action.

scholarly journals The Revenue Demands of Public Employee Pension Promises

2014 ◽  
Vol 6 (1) ◽  
pp. 193-229 ◽  
Author(s):  
Robert Novy-Marx ◽  
Joshua Rauh
Keyword(s):  
United States ◽  
Social Security ◽  
Local Governments ◽  
The United States ◽  
Policy Changes ◽  
Tax Base ◽  
Asset Return ◽  
Pension Systems ◽  
State And Local ◽  
The Cost

We calculate increases in contributions required to achieve full funding of state and local pension systems in the United States over 30 years. Without policy changes, contributions would have to increase by 2.5 times, reaching 14.1 percent of the total own revenue generated by state and local governments. This represents a tax increase of $1,385 per household per year, around half of which would go to pay down legacy liabilities while half would fund the cost of new promises. We examine sensitivity to asset return assumptions, wage correlations, the treatment of workers not currently in Social Security, and endogenous geographical shifts in the tax base. (JEL H55, H75, J26, J45)

Federalism: A Very Short Introduction

2019 ◽  
Author(s):  
Mark J. Rozell ◽  
Clyde Wilcox
Keyword(s):  
Local Governments ◽  
Political System ◽  
The United States ◽  
Power Sharing ◽  
The Political ◽  
Short Introduction ◽  
State And Local ◽  
Primary Focus ◽  
Key Events

Federalism: A Very Short Introduction provides a concise overview of the principles and operations of federalism, the political system defined by power sharing between a national government and its subnational units, from its origins and evolution to the key events and constitutional decisions that have defined its framework. While the primary focus is on the United States, a comparative analysis of other federal systems, including those of Australia, Brazil, Canada, India, Nigeria, and Switzerland, is provided. The role of federal government is explained alongside the critical roles of state and local governments. This VSI also examines whether federal structures are viable in an era of increasingly centralized and authoritarian-style government.

Mental Health Benefits in New Jersey State and Local Government

2002 ◽  
Vol 31 (2) ◽  
pp. 211-224
Author(s):  
Gary E. Roberts
Keyword(s):  
Mental Health ◽  
New Jersey ◽  
Local Government ◽  
Local Governments ◽  
Safety Issue ◽  
Health Coverage ◽  
Physical And Mental Health ◽  
Government Employees ◽  
State And Local Government ◽  
State And Local

Adequate mental health coverage is a key element of a comprehensive employee benefits package. The absence of adequate mental health coverage imposes significant costs on employees, their families, and our society as a whole and is a larger public health and safety issue. The focus of this study is to analyze mental health policies and coverage levels for New Jersey State government employees and a sample of New Jersey local governments. The results indicated an absence of parity between physical and mental health coverage for New Jersey state and local government employees. The most significant inequities include differential limits concerning the number of inpatient days and outpatient visits as well as patient contributions in terms of copay, coinsurance, and deductible provisions. A comprehensive mental health management model is proposed for adoption by state and local governments.

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 Do Pensions Matter for Recruiting State and Local Workers?

2020 ◽  
Vol 52 (1) ◽  
pp. 6-17
Author(s):  
Laura D. Quinby ◽  
Geoffrey T. Sanzenbacher
Keyword(s):  
Local Governments ◽  
Skilled Workers ◽  
Ongoing Debate ◽  
Individual Level ◽  
The Public ◽  
Pension Systems ◽  
Level Data ◽  
Private And Public ◽  
State And Local ◽  
Public Workforce

Many state and local governments have responded to financial challenges facing their pension systems by cutting benefits or by shifting costs to employees. Will these changes make it harder for state and local governments to recruit highly skilled workers? This study explores this question by linking individual-level data from the Current Population Survey on worker transitions between the private and public sectors to measures of state and local pension generosity from the Public Plans Database. The results suggest that state and local employers with relatively generous pensions are better able to recruit high-wage workers from the private sector, but that this advantage is lost as workers are asked to contribute more from current paychecks to prefund those benefits. The findings help inform an ongoing debate over the role that state and local pensions play in shaping the public workforce.

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