Download this Paper Open PDF in Browser

Are State Public Pensions Sustainable? Why the Federal Government Should Worry About State Pension Liabilities

27 Pages Posted: 27 Apr 2010 Last revised: 17 May 2010

Joshua D. Rauh

Stanford Graduate School of Business; National Bureau of Economic Research (NBER)

Date Written: May 15, 2010

Abstract

This paper analyzes the flow of state pension benefit payments relative to asset levels and contributions. Assuming future state contributions fund the full present value of new benefits, many state systems will run out of money in 10-20 years if some attempt is not made to improve the funding of liabilities that have already been accrued. The expected shortfalls raise the possibility that the federal government will be faced with a decision as to whether to bail out states driven to insolvency by their pension programs.

Keywords: Public Pensions, State and Local Government, Public Finance, Pension Reform

JEL Classification: H55, H60, H70, H72, H74

Suggested Citation

Rauh, Joshua D., Are State Public Pensions Sustainable? Why the Federal Government Should Worry About State Pension Liabilities (May 15, 2010). Available at SSRN: https://ssrn.com/abstract=1596679 or http://dx.doi.org/10.2139/ssrn.1596679

Joshua D. Rauh (Contact Author)

Stanford Graduate School of Business ( email )

655 Knight Way
Stanford, CA 94305-5015
United States

National Bureau of Economic Research (NBER)

1050 Massachusetts Avenue
Cambridge, MA 02138
United States

Paper statistics

Downloads
7,796
Rank
526
Abstract Views
30,755