Cost, Performance, and Benchmark Bias of Public Pension Funds in the United States: An Unflattering Portrait

2021 ◽  
Author(s):  
Richard Ennis
Keyword(s):  
United States ◽  
The United States ◽  
Pension Funds ◽  
Public Pension ◽  
Cost Performance

A Comprehensive Review of the Evolution of Accounting Standards for State and Local Government Pensions and Other Postemployment Benefits in The United States

2019 ◽  
Vol 46 (1) ◽  
pp. 57-77
Author(s):  
Dale L. Flesher ◽  
Craig Foltin ◽  
Gary John Previts ◽  
Mary S. Stone
Keyword(s):  
United States ◽  
Local Government ◽  
Accounting Standards ◽  
The United States ◽  
Pension Funds ◽  
Defined Benefit ◽  
Defined Contribution ◽  
Defined Contribution Plans ◽  
State And Local Government ◽  
State And Local

ABSTRACT Both the business media and the popular press have emphasized the underfunding problems associated with pension funds that are set aside for state and local government workers, a group that also includes teachers and professors at state-affiliated colleges and universities. The realization that pension funds are typically underfunded stems from the fact that the accounting standards associated with state and local government employee pension funds have led to greater transparency since 2011. This paper examines, explains, and interprets the historical development over the last 70 years of accounting standards for state and local government pension funds in the United States. Changing accounting standards, along with economic and social change, have led to consequences such as employers transforming their pension programs to avoid substantial costs and significant liabilities, for example by changing from defined benefit to defined contribution plans.

Who Benefits from Pension Enhancements?

2014 ◽  
Vol 9 (2) ◽  
pp. 165-192 ◽  
Author(s):  
Cory Koedel ◽  
Shawn Ni ◽  
Michael Podgursky
Keyword(s):  
United States ◽  
Pension System ◽  
The United States ◽  
Pension Funds ◽  
Retirement Benefits ◽  
Teacher Retirement ◽  
Front End ◽  
Pension Costs ◽  
Public Workers ◽  
Young Teachers

During the late 1990s public pension funds across the United States accrued large actuarial surpluses. The seemingly flush conditions of the pension funds led legislators in most states to substantially improve retirement benefits for public workers, including teachers. In this study we examine the benefit enhancements to the teacher pension system in Missouri. The enhancements resulted in large windfall gains for teachers who were close to retirement when the legislation was enacted. By contrast, novice teachers, and teachers who had not yet entered the labor force, were made worse off. The reason is that front-end contribution rates have been raised for current teachers to offset past liabilities accrued from the enhancements. Total teacher retirement compensation, net of contribution costs, is lower for young teachers today as a result of the enhancement legislation. Given sharp increases in pension costs in other states, this finding may generalize to young teachers in many other plans.

Financialisation and the Pension System: Lessons from the United States and the Netherlands

2017 ◽  
Vol 15 (4) ◽  
pp. 554-584 ◽  
Author(s):  
Natascha van der Zwan
Keyword(s):  
United States ◽  
The Netherlands ◽  
Pension System ◽  
The United States ◽  
Pension Funds ◽  
The State ◽  
Investment Strategies ◽  
Private Pensions ◽  
Labour Unions ◽  
Pension Systems

Financialisation and the Pension System: Lessons from the United States and the Netherlands The articles explores the financialisation of private pensions in the United States and the Netherlands. It proposes two distinct arguments. First, the article shows that both the American and the Dutch pension systems stand out internationally for their high degrees of capitalisation and the absence of substantive investment restrictions for pension funds. The article posits that both pension systems are highly financialised, yet the process of financialisation has proceeded along different historical paths and within different institutional contexts. Secondly, the article maintains that the financialisation of pension systems is accompanied by its own political dynamics. In both political economies, different groups of actors (employers, labour unions, financial professionals) have made claims over the growing concentration of pension assets. Here, particular emphasis is given to the role of the state. It shows how since the mid-1970s, both American and Dutch pension funds have altered their investment strategies, abandoning public debt as the dominant investment category. The article explains this change in terms of the rising popularity of modern portfolio theory and the immense growth of pension capital in need of new investment options. As austerity politics have made governments more dependent on financial markets, pension funds have become more assertive in leveraging their assets and demanding political reform which are in the interest of the financial industries. Financialisation has thus fundamentally altered the balance of power between the state and financial market actors.

Public Pension Reforms in the United States and Japan

1991 ◽  
Vol 24 (1) ◽  
pp. 100-126 ◽  
Author(s):  
JUNKO KATO
Keyword(s):  
United States ◽  
The United States ◽  
Public Pension ◽  
Political Strategy ◽  
Political Systems ◽  
Pension Systems ◽  
Reform Legislation ◽  
Short Period ◽  
Democratic Systems ◽  
Policy Proposals

In the early 1980s, facing the financial crises in their public pension systems, the governments of both the United States and Japan proposed reform. In each case the reform efforts failed. A few years later policy proposals by special commissions led to the enactment of reform legislation in both countries. No major political upheavals occurred in the intervening years; but in both cases, failure turned into success in a short period. The article demonstrates that similar shifts in political strategy (the use of special commissions) produced parallel outcomes (the benefits cut reforms). This study points to the universal components of political strategy in democratic systems at the same time as it emphasizes the distinctive feature of the American and Japanese political systems.

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