Tag: state and local pensions
A recent press story highlighted proposed pension cuts in San Diego and San Jose, California as pioneering efforts to rein in pension costs (New York Times 6-6-12). These cuts were deemed newsworthy because they reduced future benefits for current participants, an action which at the beginning of the financial crisis was thought to have been…
Introduction States and localities account for pensions in their financial statements according to standards laid out by the Governmental Accounting Standards Board (GASB). Under these standards, state and local plans generally follow an actuarial model and discount their liabilities by the long-term yield on the assets held in the pension fund, roughly 8 percent. Most…
