How Did State & Local Pension Plans Become Underfunded?
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How Did State & Local Pension Plans Become Underfunded
March 25, 2015
Noon – 1 p.m. Eastern
SPEAKER
Jean-Pierre Aubry, Assistant Director of State and Local Research, Center for Retirement Research at Boston College
MODERATOR
Donald E. Fuerst, Senior Pension Fellow, American Academy of Actuaries
DETAILS
The Center for Retirement Research (CRR) at Boston College has developed a new analytical tool that describes the evolution of the unfunded liability for 150 state and local pension plans in the CRR’s Public Plans Database. The tool is described in the CRR’s publication, “How Did State/Local Plans Become Underfunded?” which was released in January.
This webinar discussed the evolution of the unfunded liability in public plans from 2001, when most plans were fully funded, to 2013, when virtually every plan reported significant underfunding. The session identified the impact of a few well-defined factors—such as poor investment returns, inadequate contributions, and benefit changes—on underfunding. While all plans were hurt by two financial crises, some plans also significantly undermined their financial position by failing to make adequate contributions and by making overly optimistic actuarial assumptions.
The webinar included:
- An overview of the Center for Retirement Research;
- Background on public pension plan liability issues;
- Discussion of the CRR’s analytical tool and why the CRR believes this type of analysis should be added to every plan’s annual actuarial valuation; and
- A description of related Academy work.
Recognized by the New York Times as “the nation’s leading center on retirement studies,” the Center for Retirement Research covers all issues affecting individuals’ income in retirement. The CRR’s main areas of focus are Social Security, state and local pensions, health and long-term care, retirement finance, and older workers. The Center studies the behavioral factors that drive individuals’ decisions so it can craft solutions that work in practice, not just in theory.
This webinar was part of the Academy Capitol Forum Lunchtime Guest Webinar Series. Click here to see all webinars in this series.
ABOUT OUR GUEST SPEAKER
Jean-Pierre Aubry, Assistant Director of State and Local Research, Center for Retirement Research at Boston College
Jean-Pierre Aubry is the Assistant Director of State and Local Research at the Center for Retirement Research at Boston College (CRR). He has co-authored several CRR Issues in Brief on state and local pension plans. He also co-authored “Public Pension Funding in Practice” (Journal of Pension Economics, 2011) with Alicia H. Munnell and Laura Quinby. Mr. Aubry gained practical experience in public pension reform when he served as the lead staff person to the Special Commission to Study the Massachusetts Contributory Retirement System, chaired by Professor Munnell. His research interests include documenting the source of current state and local pension underfunding and estimating the long-term impact of recently implemented plan changes on future pension finances. Mr. Aubry received his BA degree in economics and psychology from the University of Pennsylvania.
Moderator
Donald E. Fuerst, Senior Pension Fellow, American Academy of Actuaries
Donald Fuerst is the American Academy of Actuaries’ Senior Pension Fellow. In this role, he is the actuarial profession’s chief policy liaison on pension, Social Security, and other retirement issues. He promotes the formulation of sound retirement policy by providing nonpartisan technical assistance to legislators and regulators. Before joining the Academy, Don was a Senior Partner and retirement consultant in Mercer’s Denver office where he advised corporate clients for more than 30 years on design, funding and compliance issues related to retirement programs. Don is a Member of the American Academy of Actuaries, a Fellow of the Society of Actuaries, and a Fellow of the Conference of Actuaries, and an Enrolled Actuary.
WEBINARS IN THIS SERIES
Click here to see all webinars