Reforming Teacher Pension Plans: The Case of Kansas, the 1st Teacher Cash Balance Plan

The ongoing crisis in teacher pension funding has led states to consider various reforms in plan design, to replace the traditional benefit formulas, based on years of service and final average salary (FAS). One such design is a cash balance (CB) plan, long deployed in the private sector, and increasingly considered, but rarely yet adopted for teachers. Such plans are structured with individual 401(k)-type retirement accounts, but with guaranteed returns. In this paper I examine how the nation's first CB plan for teachers, in Kansas, has played out for system costs, and the level and distribution of individual benefits, compared to the FAS plan it replaced. My key findings are: (1) employer-funded benefits were modestly reduced, despite the surface appearance of more generous employer contribution matches; (2) more importantly, the cost of the pension guarantee, which is off-the-books under standard actuarial accounting, was reduced quite substantially. In addition, benefits are more equitably distributed between short termers and career teachers than under the back-loaded structure of benefits characteristic of FAS plans. The key to the plan's cost reduction is that the guaranteed return approximates a low-risk market return, considerably lower than the assumed return on risky assets.

What happens to workplace pension saving when employers are obliged to enrol employees automatically?

We examine the effect of obliging employers to enrol employees automatically into a workplace pension scheme. We exploit the phased roll-out of automatic enrolment, by employer size, in the first country to do so nationwide (the UK), to estimate its effect on pension saving among private sector employees. We find substantial increases in pension participation and a rise in pension saving. Surprisingly, many newly enrolled employees received an employer contribution substantially above the (very low) minimum default level. Automatic enrolment also caused the pension participation of those employees who were not obliged to be automatically enrolled to more than double.

Internship for accounting undergraduates: comparative insights from stakeholders

Purpose – This study utilises an internship framework to justify the need for feedback from all three groups of internship stakeholders. The purpose of this paper is to determine the benefits, skills, and outcomes students gained through internships from the perspective of students, university and employers. Design/methodology/approach – A set of structured questionnaires was used to survey the perceptions of students, university and employers of an accounting internship. A total of 172 responses were analysed. Findings – Findings show that all three groups of stakeholders perceived that students benefit from the internship programme. They also perceived that an internship provides the students with both the technical and soft skills required in the marketplace. However, the mean score and ranking differ among the students, university and employers. Research limitations/implications – The study was conducted based on feedback on a single accounting programme. Therefore any characteristics inherent in this sample that differ from the overall population of accounting programmes could bias the results and limit its generalisability and any associated inferences. Questionnaire responses should be interpreted with caution as perceptions and self-insights are subjective and may or may not be reflective of reality. This study falls short of putting forward any reasons why results differ from previous studies or why the mean scores of the three stakeholders all differ. Further research may take into consideration a comparison of internship programmes across institutions and disciplines. Future studies can also use the reflection approach and interview to better explain the benefits and skills developed through accounting internship programmes. Practical implications – Practically, findings from this study provide feedback to the students, university and employers to continuously improve accounting internship for undergraduate accounting programmes. Social implications – Social implications lie within the research framework that emphasises the student learning experience, university support through theoretical understanding and employer contribution through the practical component. Originality/value – Internships have become part of an accounting curriculum in many universities globally. To date, most studies on internship practices are limited in scope and focus on feedback from a single perspective. This study fills the gap in the literature by conducting a perception-based survey of internship stakeholders: students, university and employers, on benefits and skills acquired through internship.