Funding public pensions

The Center for Retirement Research at Boston College issued two briefs in May on funding of state and local pension plans.

Why Does Funding Status Vary Among State and Local Plans? finds a strong correlation between plan size and funding status and discusses the factors affecting funding: funding discipline, governance, characteristics of the plan, and fiscal health of the state. The report refers to the Annual Required Contribution (ARC) that states should make as defined by GASB 27 of the Governmental Accounting Standards Board (GASB).
      Report (pdf, 12pp/232kB)
      Summary (html)

Why Don't Some States and Localities Pay Their Required Pension Contributions? finds the same factors at work as above--funding discipline, governance issues, plan characteristics, and state fiscal pressures--but also finds that the major reason plan sponsors are not paying the full ARC is that they face legal constraints on contributions. Appendix A, Table A1, of the report lists plans statutorily constrained from making their ARC (2006).
      Report (pdf, 11pp/240kB)
      Summary (html)

Labels: ,


Post a Comment

<< Home