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Author: Jun Peng
Publisher:
ISBN:
Category : Civil service
Languages : en
Pages : 32
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Book Description
The financial crisis of 2008-2009 presented financial challenges to investors, including state and local pension plans. Because public pensions are invested in equity markets, like most investors, their assets fell because of the unprecedented stock market crash. In addition, the entire decade saw historically low returns in the equity markets. This led to a short-term drop in plans' funded ratios, and an increase in plans' unfunded pension liabilities and costs. In this study, we analyze six well-funded public pension plans to learn what practices in terms of pension funding policy, benefit design, and economic assumptions have resulted in a better financial condition for these plans. This serves to provide a platform for further discussion on pension benefit reform in the public sector.
Author: Jun Peng
Publisher:
ISBN:
Category : Civil service
Languages : en
Pages : 32
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Book Description
The financial crisis of 2008-2009 presented financial challenges to investors, including state and local pension plans. Because public pensions are invested in equity markets, like most investors, their assets fell because of the unprecedented stock market crash. In addition, the entire decade saw historically low returns in the equity markets. This led to a short-term drop in plans' funded ratios, and an increase in plans' unfunded pension liabilities and costs. In this study, we analyze six well-funded public pension plans to learn what practices in terms of pension funding policy, benefit design, and economic assumptions have resulted in a better financial condition for these plans. This serves to provide a platform for further discussion on pension benefit reform in the public sector.
Author: Olivia S. Mitchell
Publisher: University of Pennsylvania Press
ISBN: 9780812235784
Category : Business & Economics
Languages : en
Pages : 692
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Book Description
From the Pension Research Council of the Wharton School, this book explores the diversity of governmental pension plans and investigates how these financial institutions must change in years to come.
Author: Lawrence J. McQuillan
Publisher: Independent Institute
ISBN: 1598131907
Category : Business & Economics
Languages : en
Pages : 202
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Book Description
California's unfunded public pension liability, when measured correctly, is two to four times larger than official government estimates. In total, California's 86 defined-benefit public pension plans are underfunded by roughly $430 billion, representing California's greatest financial challenge since the Great Depression. The failure to fully fund the pension promises has allowed the current generation to receive public services that they are not fully paying for, pushing the pension problem onto future generations. California Dreamin': Resolving the Public Pension Crisis explains how six reforms would solve the state's pension problem in an equitable, responsible, and moral way: preserving pension benefits already earned, providing competitive pensions going forward, and granting the flexibility needed so that future generations are not paying for deals they did not make.
Author: Robert Louis Clark
Publisher: University of Pennsylvania Press
ISBN: 9780812237146
Category : History
Languages : en
Pages : 280
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Book Description
From the Wharton School, offering a comprehensive assessment of the political and financial dimensions of public-sector pensions from the colonial period until the emergence of modern retirement plans in the twentieth century.
Author: Ingo Walter
Publisher:
ISBN: 9781077442368
Category :
Languages : en
Pages : 150
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Book Description
America faces two public finance challenges that - if left unaddressed - will have serious implications for the fiscal stability of state and local governments and for the quality of life of all Americans. The funded status of public pension plans and the state of the country's critical infrastructure are generally viewed as distinct subjects. This book argues otherwise. Over the long term, when one of them deteriorates, the other is sure to follow. Moreover, infrastructure investments are well suited to the portfolio needs of public pension plans, which themselves comprise the single largest pool of capital potentially available for the financing needs of American infrastructure and today are under-allocated to this asset type. This book begins with an analysis of the $4.3 trillion U.S. public pension system, drawing on a primary dataset comprising thousands of observations drawn from a decade of annual reports of the 25 largest American public pension systems - which together comprise about 55% of all public pension assets in the country. It then links sustainable pension finance to investments in real assets, specifically infrastructure projects. "Bridging the Gaps" is intended to provide greater transparency to the complex public finance challenges that mark these issues. Those with an interest in the public pension system will learn much from the discussion of these complex organizations - so critical to sustainability of retirement benefits. Asset managers and other advisors, who sell to these investors, will benefit from an empathic approach to understanding the needs of their most important clients. The book concludes with a range of ideas that can be explored by responsible public officials and policymakers as well as infrastructure agencies and their advisors. The ultimate objective is to help in the search for solutions to the persistent gaps facing America's public pension system and at the same time unlocking capital to reduce America's persistent infrastructure problems - creating winners on both ends of the financial chain.
Author: CFA Higgins (CFP®, Mark)
Publisher:
ISBN:
Category :
Languages : en
Pages : 0
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Book Description
At the end of 2021, many public pension trustees find themselves in a position that seemed unlikely a mere ten years ago. Aided by more than a decade of strong investment returns across most asset classes, the aggregate funded status of U.S. public pension plans improved meaningfully. State systems fared especially well, with the average state pension system reporting a funded ratio above 80%. These improvements are welcome news, but it would be wise to refrain from excessive celebration. Students of financial history know that periods of exceptional returns are often followed by leaner years. In addition, COVID-related supply chain disruptions are driving higher inflation, placing new pressure on pension trustees to introduce (or increase) cost of living adjustments.These challenges may seem unique, but there is historical precedence. In fact, the very first funded pension plan in the United States, the U.S. Navy Pension Plan, faced similar challenges in the early 1800s. Their failure to address them skillfully led to full liquidation of the portfolio by 1841. Nearly 200 years have passed since the sinking of the U.S. Navy Pension Plan, but several valuable lessons remain applicable today. These include: (1) remaining wary of political influence, (2) being mindful of the long-term consequences of benefit expansions; (3) managing the risk of potential mean reversion of asset class returns; and (4) sharpening one's skepticism when venturing into unfamiliar markets.This paper elaborates on these lessons by recounting the history of the U.S. Navy Pension Plan and the fateful decisions of the Plan's Trustees and the U.S. Congress. The hope is that trustees can apply these lessons and avoid making similar mistakes in the years to come.
Author: Jun Peng
Publisher: CRC Press
ISBN: 0849305519
Category : Political Science
Languages : en
Pages : 286
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Book Description
Intense media coverage of the public pension funding crisis continues to fuel heightened awareness in and debate over public pension benefits. With over $3 trillion in assets currently under management, the ramifications of poor oversight are severe. It is important that practitioners, researchers, and taxpayers be well-advised regarding any concer
Author: Alicia H. Munnell
Publisher: Rowman & Littlefield
ISBN: 0815724136
Category : Business & Economics
Languages : en
Pages : 266
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Book Description
In the wake of the financial crisis and Great Recession, the health of state and local pension plans has emerged as a front burner policy issue. Elected officials, academic experts, and the media alike have pointed to funding shortfalls with alarm, expressing concern that pension promises are unsustainable or will squeeze out other pressing government priorities. A few local governments have even filed for bankruptcy, with pensions cited as a major cause. Alicia H. Munnell draws on both her practical experience and her research to provide a broad perspective on the challenge of state and local pensions. She shows that the story is big and complicated and cannot be viewed through a narrow prism such as accounting methods or the role of unions. By examining the diversity of the public plan universe, Munnell debunks the notion that all plans are in trouble. In fact, she finds that while a few plans are basket cases, many are functioning reasonably well. Munnell's analysis concludes that the plans in serious trouble need a major overhaul. But even the relatively healthy plans face three challenges ahead: an excessive concentration of plan assets in equities; the risk that steep benefit cuts for new hires will harm workforce quality; and the constraints plans face in adjusting future benefits for current employees. Here, Munnell proposes solutions that preserve the main strengths of state and local pensions while promoting needed reforms.
Author: Nicholas Barr
Publisher: Oxford University Press
ISBN: 0199885990
Category : Business & Economics
Languages : en
Pages : 763
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Book Description
Mandatory pensions are a worldwide phenomenon. However, with fixed contribution rates, monthly benefits, and retirement ages, pension systems are not consistent with three long-run trends: declining mortality, declining fertility, and earlier retirement. Many systems need reform. This book gives an extensive nontechnical explanation of the economics of pension design. The theoretical arguments have three elements: * Pension systems have multiple objectives--consumption smoothing, insurance, poverty relief, and redistribution. Good policy needs to bear them all in mind. * Good analysis should be framed in a second-best context-- simple economic models are a bad guide to policy design in a world with imperfect information and decision-making, incomplete markets and taxation. * Any choice of pension system has risk-sharing and distributional consequences, which the book recognizes explicitly. Barr and Diamond's analysis includes labor markets, capital markets, risk sharing, and gender and family, with comparison of PAYG and funded systems, recognizing that the suitable level of funding differs by country. Alongside the economic principles of good design, policy must also take account of a country's capacity to implement the system. Thus the theoretical analysis is complemented by discussion of implementation, and of experiences, both good and bad, in many countries, with particular attention to Chile and China.
Author: Leokadia Oręziak
Publisher: Routledge
ISBN: 1000568539
Category : Business & Economics
Languages : en
Pages : 122
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Book Description
This book examines the origins and consequences of so-called pension fund capitalism, which has spread around the world since 1981, when the pension system was completely privatized in Chile. The author highlights the driving forces behind the privatization of pensions, its forms and tools used in practice, and the risks and costs related to private pensions. The reader can also learn about the experiences of various developed countries (including the USA, Canada, Australia, and Germany), as well as Latin American (including Chile) and Eastern European countries, related to the privatization of pensions. Particular attention is paid to Poland as an example of a country where such privatization failed completely. This book provides a source of serious reflection on what this privatization has led to, what its real economic and social consequences are and what the likelihood is of reversing it and strengthening the public pension system. Academic researchers and students of economics and finance, as well as social and political sciences, will find the book invaluable in understanding the problems arising from the privatization of pensions. It will also be of interest to professionals: institutions that shape or influence economic and social policy, including political parties, trade unions, non-governmental organizations, the media, and institutions operating on the financial market.
