Public Pensions and Collective Bargaining Rights: Evidence from State and Local Governments

Hoang, Trang; Goodman, Doug

doi:10.1111/puar.12936

Cited by 14 publications

(19 citation statements)

References 37 publications

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“…Prior literature suggests that public unions influence public pension affairs, due to their role in collective bargaining (Frandsen, 2016; Hoang & Goodman, 2018; Kearney, 2003). However, the empirical results have been mixed in terms of their influence on OPAC.…”

Section: Hypothesis Developmentmentioning

confidence: 99%

Public Pension Governance and Opportunistic Accounting Choice: A Politico-Economic Approach

Stalebrink

Donatella

2020

The American Review of Public Administration

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The selection of actuarial assumptions used to value state and local government pension liabilities is an important culprit of the looming state and local pension crisis in the U.S. Due to the impact these selection choices have on the value of pension liabilities and annual required contributions (ARC), pension plans are often said to make these choices opportunistically for purposes of freeing up budget resources and making pension funding look better. Using empirical data on 114 state-administered pension plans, this research shows that the likelihood of such opportunistic pension accounting choices (OPAC) increases when the plan is underfunded, organized as a cost-sharing plan, governed by a politically embedded fiduciary body, and when the sponsoring government is surrounded by a high degree of unionization, and is divided in terms of partisan control. The results also show that the likelihood of OPAC decreases when a pension plan is subjected to an audit by a Certified Public Accountant (CPA), suggesting that professional gatekeepers can play an important role in limiting the adverse effects of OPAC behavior, including insufficient ARC payments and reduced transparency of governmental financial reports.

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Section: Hypothesis Developmentmentioning

confidence: 99%

Public Pension Governance and Opportunistic Accounting Choice: A Politico-Economic Approach

Stalebrink

Donatella

2020

The American Review of Public Administration

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“…There is a long list of studies examining the effect of public unions. While the findings of these studies do not always agree, more studies than not have found that the presence of a public union led to an increase in salary or benefits or both (Brooks ) and that the positive impact of collective bargaining on pension benefits was even more evident under worsening economic conditions (Hoang and Goodman ). If employees are unionized, then the union can speak with a more concerted voice to board trustees if a reduction in the discount rate could harm the financial interests of its members.…”

Section: Theoretical Frameworkmentioning

confidence: 87%

Political Embeddedness of Public Pension Governance: An Event History Analysis of Discount Rate Changes

Wang

Peng

2018

Public Administration Review

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State governments are frequently said to manipulate the discount rate assumption to make pension funding look better, reduce employers' and employees' pension contributions, or relieve fiscal stress. Building a model from the political embeddedness perspective and applying an event history analysis to the 81 largest state-administered pension plans in the United States, the authors found that more politically embedded pension boards were actually more likely to reduce their plan's discount rate. Public union coverage and government political ideology, however, had no significant impact on discount rate changes. These findings reveal the effect of political embeddedness on pension planning decisions and provide useful insights into the intricate process of setting pension discount rates in a new era of more muted investment return expectations. This article points to both political and financial pressures facing pension boards and state governments for many years to come. Evidence for Practice• Facing severe fiscal stress, more public pension plans have chosen to reduce rather than increase their discount rate assumption to reflect the much lower average investment return since 2001. • More politically embedded pension boards are more likely to reduce the discount rate than plans with more elected board members. • Regardless of their composition, public pension boards face both political and financial pressures to take a piecemeal approach to reducing the discount rate. • Because of the gap between the current discount rate and muted investment return expectations in the future, public pension plans will continue to face pressures for the foreseeable future.

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“…Coggburn (2000) also illustrates a relationship between unionization and reduced efforts to deregulate in the states. Hoang and Goodman (2018) explore the link between public pension benefits and collective bargaining in state and local government, showing how economic conditions, like the 2008 recession, are a confounding variable in said link.…”

Section: Literature Reviewmentioning

confidence: 99%

Reform Adoption in a Postcollective Bargaining Governance Environment

Ford

Ihrke

2020

Review of Public Personnel Administration

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In this article, we use data collected from Wisconsin superintendents to determine the extent to which the curtailing of collective bargaining facilitated local public management reform adoption. The results show the near elimination of collective bargaining did spur substantial reform adoption in areas of performance pay and recruitment, and that longer serving superintendents and those with partisan ideologies were more likely to adopt management reforms. However, the results also indicate that curtailing collective bargaining appeared to hurt employee morale and made it more difficult to recruit and retain quality teachers. The results contribute to the public human resource literature by providing a real life case study of how public management practices change when collective bargaining is eliminated.

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Public Pensions and Collective Bargaining Rights: Evidence from State and Local Governments

Cited by 14 publications

References 37 publications

Public Pension Governance and Opportunistic Accounting Choice: A Politico-Economic Approach

Public Pension Governance and Opportunistic Accounting Choice: A Politico-Economic Approach

Political Embeddedness of Public Pension Governance: An Event History Analysis of Discount Rate Changes

Reform Adoption in a Postcollective Bargaining Governance Environment

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