Public Sector Pensions

Public Sector Pensions

Research

Andrew G. Biggs | Feb 10, 2015
A new study for the Mercatus Center at George Mason University explores investment-based transition costs and calculates optimal investment portfolios for pension plans, both those that remain open to new participants and those that have been closed.
George R. Crowley, Scott Beaulier | Nov 18, 2014
We find that union political contributions and collective bargaining are associated with higher incomes for state and local employees and with higher public employment, both across state and local government overall as well as within the education sector. We also find little to no evidence that union activity influences total spending.
Eileen Norcross | Feb 05, 2013
The sustainability of public sector pension plans is an issue of great fiscal concern for state and local governments in the United States. According to government reports, state public sector pension plans confront a total unfunded liability of $842 billion. Underfunding of this magnitude presents a serious fiscal problem for individual governments and will require a growing amount of budgetary resources to fund benefit promises to retired workers.
Jeffrey Miron, Robert Sarvis | Feb 13, 2012
This paper examines the fiscal health of the states, focusing on two worrisome characteristics: an understatement of unfunded pension liabilities and ever-increasing expenditures, driven primarily by health care costs.
Eileen Norcross, Benjamin J. VanMetre | Nov 08, 2011
This working paper shows how Rhode Island’s state and municipal pension systems face large and growing unfunded pension liabilities and provides recommendations for reform.
Eileen Norcross, Roman Hardgrave | Sep 28, 2011
This study focuses on public sector benefits costs in the state of New Jersey. Along with several other states, New Jersey’s pension system is badly underfunded and health care and other benefits for public sector workers are entirely unfunded.

Testimony & Comments

Research Summaries & Toolkits

Speeches & Presentations

Expert Commentary

Mar 25, 2015

Shifting public employees to defined-contribution retirement plans won’t magically make unfunded liabilities go away. Pension liabilities must be paid, regardless of what plan new employees participate in. But defined-contribution plans, which cannot generate unfunded liabilities for the taxpayer, at least put public pensions on a more sustainable track.
Mar 11, 2015

Based on new research from the Mercatus Center, Biggs argues that all public-employee plans should be making less risky investments and that a plan closed to new hires should take only a little investment risk than an open plan.
Aug 11, 2014

Lasting pension reform has three pieces: 1) Fund the benefits earned to date. 2) Stop the bleeding and close the current defined benefit plan. 3) Switch workers to a defined contribution-style plan that could include an annuity option and the features of a traditional pension that public sector workers prefer.
Jun 27, 2014

Across the nation, states and cities are struggling to keep up with their obligations to fund state worker pensions. Detroit--desperately trying to reduce its obligations in federal bankruptcy court--is the classic example. But the financial sinkhole swallowing Detroit is spreading throughout the country at an alarming rate.
May 27, 2014

The once "sure bet" of a public pension has become a roller coaster ride for American governments, employees and taxpayers. Alabama is no exception; despite recent reforms, its pension plans are at risk of running out of money in the next 10 years.
Mar 12, 2014

Wouldn't it be great if you could just decide that your monthly cellphone bill was too high and only pay half? That might work for a while, but eventually Verizon or AT&T would turn off your phone. Municipal governments have been trying the same thing with their pension bills, and it hasn't gone well. One result is a spate of municipal bankruptcies from Rhode Island to California, including Detroit's dramatic filing last year.

Charts

Experts

Podcasts

Eileen Norcross | May 20, 2014
Eileen Norcross Discusses Alabama's Pension Funds on the Matt Murphy Show

Recent Events

Mercatus Center budget scholars will share their academic research and practical knowledge with local thought leaders in a half-day seminar hosted by the Bluegrass Institute in Lexington, Kentucky.

Media Clippings

Eileen Norcross, Matthew Mitchell, | Jul 23, 2013
Detroit reports an unfunded pension liability of $634 million, but using more accurate accounting methods it's closer to $3.5 billion.
Eileen Norcross, Jerry Brito | Oct 01, 2012
Eileen Norcross and Jerry Brito cited on Virginia Watchdog discussing public pensions.
Eileen Norcross | Aug 30, 2012
Eileen Norcross cited discussing high risk financing.
Eileen Norcross | Jul 11, 2012
Eileen Norcross is quoted in the guardian discussing the straining budgets of state and local governments in the U.S.
Eileen Norcross | Jun 15, 2012
Eileen Norcross explains the effect changes will have on New Jersey's pension liability.
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