scholarly journals Sustainability of the Funded Ratio and Asset Allocation Choice of State Public Pension Plans

2019 ◽  
Vol 9 (1) ◽  
pp. 366
Author(s):  
Amod Choudhary ◽  
Nikolaos Papanikolaou
Keyword(s):  
Asset Allocation ◽  
The United States ◽  
Pension Plans ◽  
Public Pension ◽  
Key Factors ◽  
Short Term ◽  
Investment Returns ◽  
Current Member ◽  
Public Pension Plans

The paper examines State Public Pension Plans in the United States and the sustainability of their funded ratios. The authors apply a panel logit with random effects regression model of asset allocation choice and average returns during fiscal years 2001 to 2015. There are three key factors which adequately fund State Public Pension Plans: (i) current member contributions, (ii) members’ employer contributions, and (iii) investment returns on those contributions. Returns on those contributions depend heavily on allocation choice of those funds in traditional and alternative investments. Alternatives are generally assumed to provide higher average returns with higher risk. This paper shows that in the long-term, investment in traditional assets such as bonds, equities and short-term cash have a higher likelihood of funding State Public Pension Plan’s payment obligations to beneficiaries.

Costs and liabilities of US public pension systems in a low-return environment

2020 ◽  
pp. 1-18
Author(s):  
Gang Chen ◽  
David Matkin ◽  
Hyewon Kang
Keyword(s):  
Asset Allocation ◽  
Simulation Method ◽  
Public Pension ◽  
Moderating Effects ◽  
Pension Systems ◽  
Long Term Effect ◽  
Unfunded Liabilities ◽  
Investment Returns ◽  
Investment Portfolios

Abstract In recent years, a growing number of capital market professionals have projected a low-return environment in US investment portfolios – where returns in most asset classes are expected to drop below historical rates. While these specific forecasts may not fully materialize, it is natural for cyclical investment markets to go through extended periods of lower returns, creating significant risks for public pension systems which rely on investment returns to sustain their long-term solvency and offset budgetary contributions. This paper uses a simulation method to examine the long-term effect of a low-return environment on the unfunded liabilities and contribution costs of US public pension systems while considering the moderating effects of asset allocation strategies, amortization approaches, and contribution policies.

scholarly journals Pension Funding and the Actuarial Assumption Concerning Investment Returns

2003 ◽  
Vol 33 (02) ◽  
pp. 289-312 ◽  
Author(s):  
M. Iqbal Owadally
Keyword(s):  
Discount Rate ◽  
Asset Allocation ◽  
Pension Plan ◽  
Pension Plans ◽  
Defined Benefit ◽  
Return On Assets ◽  
Investment Return ◽  
Investment Returns ◽  
Pension Liabilities

An assumption concerning the long-term rate of return on assets is made by actuaries when they value defined-benefit pension plans. There is a distinction between this assumption and the discount rate used to value pension liabilities, as the value placed on liabilities does not depend on asset allocation in the pension fund. The more conservative the investment return assumption is, the larger planned initial contributions are, and the faster benefits are funded. A conservative investment return assumption, however, also leads to long-term surpluses in the plan, as is shown for two practical actuarial funding methods. Long-term deficits result from an optimistic assumption. Neither outcome is desirable as, in the long term, pension plan assets should be accumulated to meet the pension liabilities valued at a suitable discount rate. A third method is devised that avoids such persistent surpluses and deficits regardless of conservatism or optimism in the assumed investment return.

scholarly journals Pension Funding and the Actuarial Assumption Concerning Investment Returns

2003 ◽  
Vol 33 (2) ◽  
pp. 289-312 ◽  
Author(s):  
M. Iqbal Owadally
Keyword(s):  
Discount Rate ◽  
Asset Allocation ◽  
Pension Plan ◽  
Pension Plans ◽  
Defined Benefit ◽  
Return On Assets ◽  
Investment Return ◽  
Investment Returns ◽  
Pension Liabilities

An assumption concerning the long-term rate of return on assets is made by actuaries when they value defined-benefit pension plans. There is a distinction between this assumption and the discount rate used to value pension liabilities, as the value placed on liabilities does not depend on asset allocation in the pension fund. The more conservative the investment return assumption is, the larger planned initial contributions are, and the faster benefits are funded. A conservative investment return assumption, however, also leads to long-term surpluses in the plan, as is shown for two practical actuarial funding methods. Long-term deficits result from an optimistic assumption. Neither outcome is desirable as, in the long term, pension plan assets should be accumulated to meet the pension liabilities valued at a suitable discount rate. A third method is devised that avoids such persistent surpluses and deficits regardless of conservatism or optimism in the assumed investment return.

The Future of Muslim Education in the United States: An Agenda for Research

2003 ◽  
Vol 20 (3-4) ◽  
pp. 46-82
Author(s):  
Fathi Malkawi
Keyword(s):  
United States ◽  
The United States ◽  
American Education ◽  
Future Trends ◽  
Muslim Community ◽  
Short Term ◽  
The Future ◽  
Muslim Education ◽  
Future Plans

This paper addresses some of the Muslim community’s concerns regarding its children’s education and reflects upon how education has shaped the position of other communities in American history. It argues that the future of Muslim education will be influenced directly by the present realities and future trends within American education in general, and, more importantly, by the well-calculated and informed short-term and long-term decisions and future plans taken by the Muslim community. The paper identifies some areas in which a wellestablished knowledge base is critical to making decisions, and calls for serious research to be undertaken to furnish this base.

Italy's politics without policy: Balancing Atlanticism and Europeanism in the Middle East

Modern Italy ◽  
2008 ◽  
Vol 13 (2) ◽  
pp. 135-153 ◽  
Author(s):  
Raffaella A. Del Sarto ◽  
Nathalie Tocci
Keyword(s):  
Foreign Policy ◽  
Middle East ◽  
The United States ◽  
The European Union ◽  
Short Term ◽  
The Government ◽  
Specific Interests ◽  
Policy Shifts ◽  
The Eu

Focusing on Italy's Middle East policies under the second Berlusconi (2001–2006) and the second Prodi (2006–2008) governments, this article assesses the manner and extent to which the observed foreign policy shifts between the two governments can be explained in terms of the rebalancing between a ‘Europeanist’ and a transatlantic orientation. Arguing that Rome's policy towards the Middle East hinges less on Italy's specific interests and objectives in the region and more on whether the preference of the government in power is to foster closer ties to the United States or concentrate on the European Union, the analysis highlights how these swings of the pendulum along the EU–US axis are inextricably linked to a number of underlying structural weaknesses of Rome's foreign policy. In particular, the oscillations can be explained by the prevalence of short-term political (and domestic) considerations and the absence of long-term, substantive political strategies, or, in short, by the phenomenon of ‘politics without policy’ that often characterises Italy's foreign policy.

scholarly journals Annuity Pricing in Public Pension Plans: Importance of Interest Rates

2018 ◽  
Author(s):  
Nino Abashidze ◽  
Robert Clark ◽  
Beth Ritter ◽  
David Vanderweide
Keyword(s):  
Interest Rates ◽  
Pension Plans ◽  
Public Pension ◽  
Public Pension Plans
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