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The Future of Public Employee Retirement Systems

The Future of Public Employee Retirement Systems

Author: Olivia S. Mitchell; Gary Anderson
Publisher: Oxford University Press
ISBN: 9780199573349
Published In: August 2009
Format: Hardback , 368 pages
Jurisdiction: Canada, Germany, International, Japan, U.S. ? Disclaimer:
Countri(es) stated herein are used as reference only

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As pension funds increasingly come under pressure, this volume provides a timely reassessment of the situation in the public sector
Presents the latest research, informed by current practice and thinking, from some of the leading pensions scholars, consultants, and practitioners
Considers the costs, benefits, and future of public pensions in the light of financial and demographic challenges
International coverage, with particular focus on the US, Japan, Canada, and Germany

People covered by public pensions are often the subject of 'pension envy:' that is, their benefits might seem more generous and their contributions lower than those offered by the private sector. Yet this book points out that such judgments are often inaccurate, since civil servants hold jobs with few counterparts in private industry, such as firefighters, police, judges, and teachers. Often these are riskier, dirtier, and demand more loyalty and discretion than would be required of a more mobile labor force in the private sector. The debate challenges traditional ideas about how the public employee labor contract is structured and raises questions about how such employees are attracted to the public sector, retained and motivated on the job, and retired, via an entire compensation package of wages and benefits. Authors explore aspects of these schemes, addressing the cost and valuation debate, along with the political economy of how public pension asset pools are perceived and managed, an increasingly important topic in times of global financial turmoil. The discussion also explores ways that public pensions can be strengthened in the US, Japan, Canada, and Germany.

The volume captures a vigorous debate currently underway by academics, financial experts, regulators, and plan sponsors, all seeking to define a new future for public retirement systems. It will be of substantial interest to a wide range of readers, since public sector employees and their representatives will naturally find the comparisons and arguments over valuation of keen interest. Public pension administrators and policymakers seeking an explanation of what makes these plans so costly will gain a new understanding of how the arguments stack up. Private sector employers and plan sponsors can learn much from efforts to reform these retirement systems in states and countries around the world. Finally, investors and the taxpaying public more generally may be at risk to cover these long-term promises, so it behoves them to pay close attention to the financing and investment practices of these plans, along with their valuation.

This volume represents an invaluable addition to the Pension Research Council / Oxford University Press series as it includes actuarial, economic, and financial perspectives making it useful for academics, retirement plan administrators, and public employees wishing to understand the challenges facing public pensions.

Readership: Economists, Actuaries, Pension policymakers and consultants, Public administrators; Academics, researchers and advanced students of pensions and pension policy, HRM, and industrial relations.

1: Olivia S. Mitchell: The Future of Public Employee Retirement Systems
Part I: Costs and Benefits of Public Employee Retirement Systems
2: Stephen T. McElhaney: Estimating State and Local Government Pension and Retiree Health Care Liabilities
3: Jeremy Gold and Gordon Latter: The Case for Marking Public Plan Liabilities to Market
4: M. Barton Waring: Between Scylla and Charybdis: Improving the Cost Effectiveness of Public Pension Retirement Plans
5: Parry Young: Public Pensions and State and Local Budgets: Can Contribution Rate Cyclicality Be Better Managed?
6: Ken McDonnell: Benefit Cost Comparisons Between State and Local Governments and Private Industry Employers
7: Edwin C. Hustead: Administrative Costs of State Defined Benefit and Defined Contribution Systems
8: Toni Hustead: Thinking About Funding Federal Retirement Plans
Part II: Implementing Public Retirement System Reform
9: Raimond Maurer, Olivia S. Mitchell, and Ralph Rogalla: Reforming the German Civil Servant Pension Plan
10: Silvana Pozzebon: The Outlook for Canada's Public Sector Employee Pensions
11: Junichi Sakamoto: Unifying Pension Schemes in Japan: Toward a Single Scheme for Both Civil Servants and Private Employees
12: Keith Brainard: Redefining Traditional Plans: Variations and Developments in Public Employee Retirement Plan Design
13: Roderick B. Crane, Michael Heller, and Paul J. Yakoboski: Defined Contribution Pension Plans in the Public Sector: A Benchmark Analysis
Part III: The Political Economy of Public Pensions
14: Robert L. Clark, Lee A. Craig, and Neveen Ahmed: The Evolution of Public Sector Pension Plans in the United States
15: Brad M. Barber: Pension Fund Activism: The Double-Edged Sword
16: Beth Almeida, Kelly Kenneally, and David Madland: The New Intersection on the Road to Retirement: Public Pensions, Economics, Perceptions, Politics, and Interest Groups

Edited by Olivia S. Mitchell, Executive Director of the Pension Research Council, Wharton School, University of Pennsylvania, and Gary Anderson, Public pensions consultant and member of the Advisory Board, Pension Research Council, Wharton School, University of Pennsylvania

Contributors:
Neveen Ahmed, doctoral candidate in Economics, North Carolina State University,
Beth Almeida, Executive Director, National Institute on Retirement Security,
Gary Anderson, public pension consultant,
Brad M. Barber, Professor of Finance, Graduate School of Management, UC Davis,
Keith Brainard, research director, National Association of State Retirement Administrators,
Robert L. Clark, Professor of Economics and Professor of Management, Innovation, and Entrepreneurship, North Carolina State University,
Lee A. Craig, Alumni Distinguished Professor of Economics, North Carolina State University,
Roderick B. Crane, Director of Institutional Client Services, TIAA-CREF,
Jeremy Gold pension finance consultant,
Michael Heller, Vice President of Actuarial Consulting Services, TIAA-CREF,
Edwin C. Hustead, former Senior Vice President in charge of the Arlington, Virginia Hay Group actuarial practice and all Hay governmental actuarial and benefits consulting,
Toni Hustead, former Chief of the Veterans Affairs and Defense Health Branch, US Office of Management and Budget, Executive Office of the President,
Kelly Kenneally, communications advisor to the National Institute on Retirement Security,
Gordon Latter, head of Pension and Endowment Strategy, Merrill Lynch Global Securities Research and Economics Group,
David Madland, Director of the Work/Life Program, Center for American Progress,
Raimond Maurer, endowed Chair of Investment, Portfolio Management, and Pension Finance, Finance Department, Goethe University of Frankfurt,
Ken McDonnell, Program Director, American Savings Education Council, Washington, DC,
Stephen T. McElhaney, senior public sector actuary, Mercer,
Olivia S. Mitchell, Executive Director of the Pension Research Council, Wharton School, University of Pennsylvania ,
Silvana Pozzebon, Associate Professor, Department of Human Resources Management, HEC Montréal (École des Hautes Études Commerciales de Montréal),
Ralph Rogalla, Research Associate, Department of Finance, Goethe University of Frankfurt, Junichi Sakamoto, Chief Adviser to the Pension Management Research Group, Nomura Research Institute,
M. Barton Waring, Chief Investment Officer for Investment Strategy and Policy, Barclays Global Investors, Emeritus,
Paul J. Yakoboski, Principal Research Fellow, TIAA-CREF Institute,
Parry Young, independent consultant on pension and other postemployment benefit issues related to US state and local governments.

"A timely contribution to the debate taking place in many developed countries on what pensions should be provided for employees working in the public sector." - Bryn Davies, Journal of Aging and Society 2011