Pension Ratios as 'Correlates' of Municipal Pension Underfunding

Posted: 19 Jul 2014

See all articles by Barry R. Marks

Barry R. Marks

University of Houston, Clear Lake - School of Business and Public Administration

K. K. Raman

The University of Texas at San Antonio

Date Written: Summer 1985

Abstract

Unlike the corporate sector, detailed estimates of unfunded pension liabilities for most local governments are not available. Thus, prior research on the association between unfunded pension liabilities and municipal creditor decisions (Copeland and Ingram 1983; Marks and Raman 1985) has implicitly assumed that certain pension ratios are good surrogates for municipal pension underfunding. In this paper, we rely on a theoretical model by Ehrenberg (1980) to test empirically the appropriateness of pension ratios as "correlates" of municipal pension underfunding. These ratios were found to be correlated with pension underfunding, although they accounted for only about 30 percent of the variance in the underfunding variable.

Keywords: governmental pension underfunding, pension ratios, correlates for underfunding

JEL Classification: M41

Suggested Citation

Marks, Barry R. and Raman, K. K., Pension Ratios as 'Correlates' of Municipal Pension Underfunding (Summer 1985). Journal of Accounting and Public Policy, Vol. 4, No. 2, 1985. Available at SSRN: https://ssrn.com/abstract=2467615

Barry R. Marks

University of Houston, Clear Lake - School of Business and Public Administration ( email )

Houston, TX 77058
United States

K. K. Raman (Contact Author)

The University of Texas at San Antonio ( email )

One UTSA Circle
San Antonio, TX 78249
United States
210-458-8749 (Phone)

Register to save articles to
your library

Register

Paper statistics

Abstract Views
160
PlumX Metrics