ARE STATE PUBLIC PENSIONS SUSTAINABLE? WHY THE FEDERAL GOVERNMENT SHOULD WORRY ABOUT STATE PENSION LIABILITIES

2010/09/01 by Joshua D. Rauh, Joshua Rauh
Business, Management and Accounting · Social Sciences · Economics, Econometrics and Finance · #Financial Literacy, Pension, Retirement Analysis #Insurance, Mortality, Demography, Risk Management #Housing Market and Economics

paper · doi:10.17310/ntj.2010.3.08

Abstract

This paper analyzes the flow of state pension benefit payments relative to asset levels and contributions. Assuming future state contributions fund the full present value of new benefits, many state systems will run out of money in 10-20 years if some attempt is not made to improve the funding of liabilities that have already been accrued. The expected shortfalls raise the possibility that the federal government will be faced with a decision as to whether to bail out states driven to insolvency by their pension programs.

Citations

• Social Security, Induced Retirement, and Aggregate Capital Accumulation

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