State and Local Pensions: What Now?

Index

249 Index ABO (accumulated benefit obligation), 50–51, 58, 113 Accounting methods/standards: annual earnings , 49–50; constitutional issues, 37–38; cost allocation, 49, 51–54; discount selection, 49, 54–57, 64–68, 73–74; regulatory history, 17–18, 32; revisions/ proposals, 57–58, 68–73, 76–77, 179 Accrual rates, and defined contribution plan introductions, 194–95 Accumulated benefit obligation (ABO), 50–51, 58, 113 Actuarial cost methods: in budget allocation analysis, 117–18; for cost allocation question, 49, 51–55; in fund status comparisons, 82, 85–87 Administrative costs, defined benefit plans, 176–77, 190 Age of plan, in fund status comparisons, 85 Age statistics, state/local government employees, 141 Alabama, bankruptcy case, 1, 3 Alaska, 123, 192, 195–96, 219 Allen, Danielle, 224 Annual required contribution (ARC): discount rate impact, 61–62; and equities investments, 67–68; in fund status comparisons, 78–87, 89–91; in GASB’s accounting standards, 18, 57, 73; local vs. state-administered plans, 89–91; payment patterns, 5, 79–84, 89–91, 101–02, 179–80. See also Budget allocation , pension spending Annuities, 15, 31, 55, 206 Anti-spiking provisions, pension calculations , 185–86 ARC. See annual required contribution (ARC) Arizona, contract protections, 219 Asset-benefit payment ratios, 108–12. See also Funded ratios/fund status Asset totals, 5, 22. See also Funded ratios/ fund status Asset valuation. See accounting methods/ standards Auto escalation and automatic enrollment, 189 Automatic enrollment, 401(k) plans, 188–89 Bankruptcy filings, city governments, 1, 3 Benefit provisions. See specific topics, e.g., Accounting methods/standards; Compensation packages, public/private comparisons ; Defined benefit plans; Pension plans, overview; Unions 250 Index Bismarck City Employees’ Pension Plan, 88 Blended rate, in GASB accounting method proposals, 68–73 Board structure, as funded ratio factor, 83–84 Bond instruments: borrowing costs, 132–36; for pension obligations, 117, 118, 124–32 Borjas, George J., 146 Budget allocation, pension spending: overview, 105–08, 123–24, 136–37; benefit exhaustion projections, 108–12; with bond financing, 124, 126–32; and borrowing costs, 132–36; potential share calculations, 112–15; system comparisons , 115–24. See also Funded ratios/ fund status California: bankruptcy case, 1, 3; bond issuances , 126; in budget allocation analysis, 105–06, 115, 119–20, 123; budget share problem, 9, 87, 223; cash balance plan, 204; contract protections, 64, 221, 222; in fund status comparison, 75, 88; overfunding appearance effects, 4, 94; wage comparison study, 147–49 Career average approach, defined benefit plans, 203–05 Cash balance plans, 203–04, 228–29 Census Bureau information, 21–22 Center for Retirement Research, 110, 112–13, 123–24 Central Falls, Rhode Island, 1, 3 Closed plan variable, fund status comparisons , 95, 97 COLAs. See Cost-of-living-adjustments (COLAs) Collective bargaining. See Unions Colorado, 21, 181–82, 195–96, 221–22 Commerce Clause power, pension regulation , 37–38 Compensation packages, public/private comparisons: overview, 9–10, 139–43, 168–69, 211–12; benefit-cutting argument , 5, 146–47, 149–50, 216–18, 227; health insurance, 145, 150–51; job security, 153–54; literature categorization , 143–46; pension coverage, 145, 150, 151–53; and replacement rate hypothesis, 161–68; wage analysis studies , 144–45, 146–49; wealth at retirement , 154–61 Contracts Clause and pension changes, 64–65, 219, 221 Contribution levels, employees, 21, 31, 177, 216. See also Defined contribution plans Cost allocation methods, benefit provisions, 49, 51–54 Cost comparisons: defined benefit vs. defined contribution administration, 176–77, 190; fund status variations, 78, 96–99 Cost-of-living-adjustments (COLAs): in budget allocation analysis, 117; contract protections, 181–82; plan varieties, 29–30; as reform strategy, 21, 216–17, 221–22; Rhode Island’s example, 225, 226 Costs, state-borrowing, pension system impact, 132–36 Davis v. Michigan, 31 Debt patterns: ARC payment correlations, 82, 86; from bond issuances, 127–32; and borrowing costs, 132–36; and funded ratios, 94–95 Defined benefit plans: overview, 170–71; final pay formula effects, 182–86; financial strengths/weaknesses, 178–82; improvement strategies, 203–06, 208–09, 214, 228–29; public employment tradition, 171–78; and replacement rate calculations, 164–67; structural characteristics, 27–28; and wealth at retirement, 160 Defined contribution plans: financial strengths/weaknesses, 10, 186–92, 212; in fund status comparisons, 83, 84; improvement strategies, 202–03, 206– 09; median balances, 227–28; private sector incentives, 171–78; public sector activity, 192–200; and replacement rate calculations, 164–67 Delaware: in budget allocation analysis, 105, 115, 116–17; in fund status comparison, 8, 75...