Abstract

http://ssrn.com/abstract=2368045
 


 



A Public Pensions Bailout: Economics & Law


Terrance O'Reilly


Willamette University - College of Law

December 16, 2013

University of Michigan Journal of Law Reform, Forthcoming

Abstract:     
In several states, public pensions plans are at risk of insolvency within a decade. If public pension plans do become insolvent, it seems likely that the federal government will bail them out. This paper proposes that the federal government prepare for the prospect of federal financial support of public pensions by instituting an optional regulatory regime for these plans. In states that elect to participate, public plans would be eligible for federal financial support in the event of severe financial distress. All public plans in these states would be subject to a federal regulatory regime similar to ERISA, including minimum funding requirements. States could elect not to participate, but then their public plans would not be eligible for federal financial support. Sponsors of regulated plans could also be given the authority to revise the benefits of existing employees with respect to future services, an option that private employers have always possessed. This flexibility would allow for much more significant pension reform on the state and local level, since in many states pension reforms can only alter the benefits of new hires.

Number of Pages in PDF File: 27

Keywords: public pensions, bailouts, public finance, fiscal federalism, retirement security, ERISA, insurance, state and local governments

JEL Classification: H75, H81

Accepted Paper Series


Download This Paper

Date posted: December 16, 2013 ; Last revised: April 19, 2014

Suggested Citation

O'Reilly, Terrance, A Public Pensions Bailout: Economics & Law (December 16, 2013). University of Michigan Journal of Law Reform, Forthcoming. Available at SSRN: http://ssrn.com/abstract=2368045 or http://dx.doi.org/10.2139/ssrn.2368045

Contact Information

Terrance O'Reilly (Contact Author)
Willamette University - College of Law ( email )
245 Winter St. SE
Salem, OR 97301
United States
Feedback to SSRN


Paper statistics
Abstract Views: 535
Downloads: 185
Download Rank: 94,456

© 2014 Social Science Electronic Publishing, Inc. All Rights Reserved.  FAQ   Terms of Use   Privacy Policy   Copyright   Contact Us
This page was processed by apollo7 in 0.219 seconds