A value-based assessment of alternative US state pension plans
Lekniute,Z. Beetsma,R.M.W.J. Ponds,Eduard
Lekniute,Z.
Beetsma,R.M.W.J.
Ponds,Eduard
Abstract
We explore how the contract values of the various stakeholders of a typical US state civil servants pension fund are affected under the continuation of current policies and under alternative policies, such as changes in contribution, indexation and investment allocation policies. We find that all participant cohorts derive a substantial net benefit from the current pension contract, while all tax-paying cohorts make substantial contributions. The shift in value from tax payers to participants can be reduced substantially by having the latter make larger contributions or making indexation less generous. Under our baseline calibration, and continuation of existing policies, the chances are high that the fund's assets get depleted in the coming decades.
Description
Date
2018-04
Journal Title
Journal ISSN
Volume Title
Publisher
Research Projects
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Journal Issue
Keywords
G23 - Non-bank Financial Institutions ; Financial Instruments ; Institutional Investors, H60 - General, SDG 1 - No Poverty
Citation
Lekniute, Z, Beetsma, R M W J & Ponds, E 2018, 'A value-based assessment of alternative US state pension plans', Journal of Pension Economics & Finance, vol. 17, no. 2, pp. 129-169. https://doi.org/10.1017/S1474747216000214
License
info:eu-repo/semantics/closedAccess