How Prepared are State and Local Workers for Retirement?

Munnell, Alicia H.; Aubry, Jean‐Pierre; Hurwitz, Josh; Quinby, Laura

doi:10.2139/ssrn.1955984

Cited by 2 publications

(2 citation statements)

References 16 publications

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“…Pre-Great Recession, found no statistically significant relationship between borrowing costs, as measured by state or municipal bond spreads, and unfunded pension liabilities. Post-2009, Aubry, Crawford, andMunnell (2017) found a statistically significant relationship between bond spreads and unfunded pension liabilities, yet this relationship was not substantial, and its statistical significance was sensitive to specification. One reason for these inconsistent results is a fundamental empirical difficulty in identifying whether pension underfunding itself is driving increased borrowing costs or whether pension underfunding is a symptom of other factors, such as general fiscal mismanagement or a shrinking tax base.…”

Section: Changes To Investment Strategiesmentioning

confidence: 95%

Causes and Consequences of the Crises in State and Local Pension Funding: Research to Inform the Development of a Road Map for Reform

2023

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A state or local pension crisis occurs when a pension system faces substantial and persistent underfunding. There is not a single national pension crisis: There are many small crises throughout the United States, reflecting local circumstance, history, and constraints, including legacy pension costs associated with current retirees and former employees. Although concern about the crises surrounding state and local pension systems is not new, much of the research has tended to focus on specific topics, such as the relationship between pension liabilities and the actuarial methods and assumptions used to discount future liabilities, asset portfolio allocation, workforce incentives, and the effects of pension reform. The consequence of a lack of a global perspective is that practitioners aiming to address a pension crisis lack a framework or road map informed by rigorous research and analysis to consider the full extent of the problem, the underlying causes, the consequences, the array of reform options, the impacts of those reforms, and the elements of implementation that are likely to have the greatest chance of success.The objective of this report is to holistically consider the extent and causes of pension crises; the contextual setting, such as legal constraints; and downstream effects, such as the crowding out of public services, financial well-being of public employees, and effective management and retention of the workforce. The aim is to lay the foundation for a road map for reform. We synthesized the available research, data, and resources for the development of a prototype road map for reform, and we supplement this information with insights garnered from discussions with subject-matter experts. This report summarizes the research and findings. The analysis in this report may be of interest to practitioners and policymakers, as well as the research community concerned with the underfunding of public pensions.A companion brief provides a prototype road map to help guide state and local pension policymakers and inform stakeholders about the dimensions of public-sector pension reform and policy options . RAND Education and LaborThis study was undertaken within RAND Education and Labor, a division of the RAND Corporation that conducts research on early childhood through postsecondary education programs, workforce development, and programs and policies affecting workers, entrepreneurship, and financial literacy and decisionmaking. Questions about this report should be directed to Beth Asch,

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Section: Changes To Investment Strategiesmentioning

confidence: 95%

Causes and Consequences of the Crises in State and Local Pension Funding: Research to Inform the Development of a Road Map for Reform

2023

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“…Pensions are a major part of the US retirement system, covering 88% of government workers and 12% of all workers (Aubry and Wandrei, 2021; Center for Retirement Research at Boston College, 2019). Pension funds manage 21% of the USA’s retirement assets, totaling $5.7tn in 2020 (Beath and Flynn, 2020).…”

Section: Introductionmentioning

confidence: 99%

Flawed charts in pension fund popular reports

Garrett

2023

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Purpose The purpose of this study was to investigate how pension funds use charts in popular reports. Popular reports communicate a fund’s financial health to non-technical audiences, and often contain charts, tables, and other graphical elements. Do these graphics meet audiences’ information needs and align with chart best practices? Design/methodology/approach This study focused on the 60 retirement funds receiving a 2021 popular report award from the Government Finance Officers Association. The author analyzed each graphic’s topic and design. Findings Most funds presented key topics (such as funding rate and portfolio return), but they generally lacked helpful benchmarks or peer comparisons. A total of 30% of reports had one or more broken charts, where their visual elements did not match the underlying data. A total of 70% of the reports contained at least one badly designed chart. These design flaws included non-zero (truncated) axes, hidden non-zero axes and misleading 3D perspectives. Originality/value To the best of the authors’ knowledge, this paper is the first to examine chart quality in pension fund popular reports.

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How Prepared are State and Local Workers for Retirement?

Cited by 2 publications

References 16 publications

Causes and Consequences of the Crises in State and Local Pension Funding: Research to Inform the Development of a Road Map for Reform

Causes and Consequences of the Crises in State and Local Pension Funding: Research to Inform the Development of a Road Map for Reform

Flawed charts in pension fund popular reports

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