Public Employee Pensions in Missouri: A Looming Crisis
Show-Me Institute Policy Study, No. 36, March 2013
32 Pages Posted: 23 Mar 2013
Date Written: March 11, 2013
This paper describes how public employee pensions currently measure their financial health; discusses the consensus among economists that current accounting rules significantly understate pension liabilities and overstate pension funding levels; and describes how pension financing would appear using accounting rules similar to those required for private sector pensions or for public employee plans in other countries. Following that is discussion of objections to fair market valuation. Finally, we discuss the costs and benefits of potential reforms, including shifting to defined contribution or cash balance pension structures.
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