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The article describes the changes solutions in the recognition of acquired pension rights in the framework of social security in national accounts. The principles applicable to September 2014 and the new guidelines contained in the System of National Accounts (SNA 2008) and the European System of Accounts (ESA 2010) are discussed. The author indicats differences between the systems and presents European solutions. Arguments are given that determined the non-inclusion of unfunded pension liabilities of public pension systems to statistics produced for the purposes of the excessive deficit procedure.

A major aim of the recent updates of National Accounting standards (SNA2008 and ESA2010) is to provide a more complete picture of households' wealth. In this course it will become mandatory for European countries to publish annual estimates of unfunded public pension entitlements (UPPE) from 2017 onwards. This study describes the methodological concepts behind this new figure of national accounts. After a review of past studies on the subject of UPPE we provide a large cross-country comparison for 18 EU countries of this new pension wealth figures and discuss a number of possible applications for policy makers and researchers. This includes the use to estimate the offset between UPPE and savings (Feldstein 1974). Finally, we show the distribution of households' wealth across Europe including financial wealth, dwellings and UPPE. Many prosperity differences between countries with Beveridgean and Bismarkian pension systems as well as between western and central eastern European countries are eliminated when considering these three wealth categories. In addition, a direct comparison of UPPE with replacement rates shows that these two proxies for the generosity of pension systems are completely uncorrelated at the cross-country level.

This study reviews the funding status of state‐administered pension plans and their impact on state credit quality. As the fund ratio (actuarial assets/actuarial accrued liability) of state‐administered pension plans decreases, states are more likely assigned a lower rating. Moreover, rating outlooks are sensitive to the fund ratio, especially for migration between stable and negative outlooks for states with lower fund ratios. These results are a timely pretest to the 2013/2014 implementation of GASB Statements No. 67 and 68, serving as a benchmark to assess whether new reporting requirements will yield information to alter the market's response to unfunded pension liabilities.

The problems -- How are defined-benefit pensions calculated? -- How are pension funds amassed? -- California's massive public pension unfunded liabilities -- What are the major drivers of the pension problem? -- Why did lawmakers allow this problem to worsen and why have they not solved it? -- The immorality of California's public pension crisis -- Why pay pensions at all? -- The critical elements of a comprehensive solution -- The fiscal advantages -- The moral advantages

Many studies have documented the pervasive underfunding of public sector pension plans in the United States in recent years. The deterioration of the funded status of public pension plans coincided with severe fiscal crises that state and local governments experienced in the 2000s. This development has led to a suspicion that state and local governments have decreased employer pension contributions as a backdoor means of running fiscal deficits. In this paper, the authors investigate the extent to which this phenomenon has occurred. They estimate panel data regressions using the Boston College Center for Retirement Research's Public Plans Database, which provides data for 2001 through 2010. The authors find that contrary to popular belief, plan sponsors do not reduce their contributions in response to negative fiscal or economic shocks. In contrast, plan sponsors' contributions to their pension plans increase in response to growth in their unfunded liabilities. The authors document that the public pension underfunding crisis during the 2000s developed largely as a consequence of portfolio returns that fell short of expectations. Public pension plans' assets portfolios have a relatively high share of equities and other risky assets, leaving the plans' funded status vulnerable to asset price fluctuations. Although plan sponsors increased their contributions in response to the growth of unfunded liabilities, they did not do so by enough to fully counteract the effect of the subpar portfolio returns. This finding holds across the spectrum of plans ranked in terms of funded status in 2010.

Most countries have separate pension plans for public-sector employees. The future fiscal burden of these plans can be substantial as the government usually is the largest employer, pension promises in the public sector tend to be relatively generous, and future payments have to be paid out directly from government revenues (pay-as-you-go) or by funded plans (pension funds) which tend to be underfunded. The valuation and disclosure of these promises in some countries lacks transparency, which may hide potentially huge fiscal liabilities to be passed on to future generations of workers. In order to arrive at a fair comparison between countries regarding the fiscal burden of their public-sector pension plans, this article recommends that unfunded pension liabilities should be measured and reported according to a standard approach for reasons of fiscal transparency and better policymaking. From a sample of Member countries of the Organisation for Economic Co-operation and Development, the size of the net unfunded liabilities as of the end of 2008 is estimated in fair value terms. This fiscal burden can also be interpreted as the implicit pension debt in fair value terms.

Cities now commonly engage with financial actors, tools, and markets to manage their budgets and associated activities. The growing significance of finance within urban governance is connected by some scholars to the latter's increasingly speculative character. One area of urban governance where financial tools are now commonly used for speculative ends are public pensions. Across the United States, many state and local governments face large unfunded pension liabilities. In some cases, this has led them to issue pension obligation bonds to reduce their unfunded liabilities. This paper examines the extent of recent pension obligation bond issuance and develops a comparative case study of three Massachusetts municipalities. The research results show that the speculative content of pension obligation bonds varies, even across three Massachusetts municipalities. By using pension obligation bonds, all three case study cities have exposed themselves to different levels of financial risk and have given themselves a long-term governance challenge by installing a speculative financial tool within their budgeting.

State and local governments are grappling with huge unfunded liability costs centered on public sector pensions and other postretirement benefits (OPEBs). Payments to cover these liabilities are crowding out revenues for essential public services. The policies and practices that determine public sector pay and benefits have become a significant part of the national conversation in the United States and Europe. This article provides commentary and a summary of a book addressing this topic: Rethinking Public Sector Compensation: What Ever Happened To The Public Interest? Recent national reforms on public pay and benefits are documented as well as the subsequent legal challenges that have emerged in several jurisdictions. The article conclusion is that it is imperative that these unfunded liabilities be addressed in a timely, comprehensive and fair manner, and that public sector compensation must be sustainable and reflect the reality of a new emerging workforce. However, the outcome from current litigation in several states will either significantly expand or restrict the ability to manage these public retirement plans.

State and local governments are grappling with huge unfunded liability costs centered on public sector pensions and other postretirement benefits (OPEBs). Payments to cover these liabilities are crowding out revenues for essential public services. The policies and practices that determine public sector pay and benefits have become a significant part of the national conversation in the United States and Europe. This article provides commentary and a summary of a book addressing this topic: Rethinking Public Sector Compensation: What Ever Happened To The Public Interest? Recent national reforms on public pay and benefits are documented as well as the subsequent legal challenges that have emerged in several jurisdictions. The article conclusion is that it is imperative that these unfunded liabilities be addressed in a timely, comprehensive and fair manner, and that public sector compensation must be sustainable and reflect the reality of a new emerging workforce. However, the outcome from current litigation in several states will either significantly expand or restrict the ability to manage these public retirement plans. Adapted from the source document.

To examine pensions Samuelson's overlapping‐generations model is generally used: its basic workings are set out here for an open economy. Pay‐as‐you‐go (PAYGO) pensions are attractive when the rate of population growth exceeds the real rate of interest; then all generations are better off for the existence of the pension. The only cost is the income tax distortion. Once the rate of growth falls below the real interest rate, only the cost is left and it is better for the state to'fund'its pensions. If the state borrows to finance the transition to a funded system, it substitutes explicit debt for unfunded liabilities, which leaves its balance sheet unchanged; this avoids the problem of the existing young generation'paying twice'for its pensions.

State and local public sector employee pensions are widely known to be underfunded, but pension financial reports do not reveal the true extent of funding shortfalls. Pension accounting methods assume that plan investments can earn high returns without taking any account of the market risk involved. This gives a false sense of the financial strength of public sector pensions and understates risks to taxpayers. Since accrued pension benefits are legally and constitutionally protected, any pension funding shortfalls must be met by taxpayers. This benefit guarantee amounts to an effective put option on plan investments, the cost of which is not disclosed under current actuarial accounting. This paper uses an options pricing method to calculate the market value of taxpayer guarantees underlying public sector pensions. The average funding ratio declines from 83 percent under actuarial accounting to 45 percent under this options pricing approach. The typical state has unfunded public pension liabilities three times larger than its explicit government debt. Public pension shortfalls equal an average of 27 percent of state gross domestic product, posing a significant fiscal challenge in coming years. Accurate measures of public pension liabilities are important for policy makers, taxpayers, investors considering the economic environment in which to start or locate a business, and bond purchasers considering the risk premia appropriate to municipal government bonds that are in practice subordinate to public pension liabilities.

Intro -- Contents -- Preface -- Introduction -- Evolution -- Recent Changes -- Objectives of Control -- Range of Process Controls -- From Fund Controls to Global Budgets -- From Cash Limits to Cash Management -- Policy Reviews -- Evaluation -- From Financial to Efficiency Audit -- Involvement of the Users -- Institutional Development -- 1 Payments Systems -- Payment Stages -- Release of Funds and Organizing Payments -- Commitment Stage -- Types of Payments Systems -- Method of Payment -- Security of Payments -- Relations with the Banking System -- Commercial Banking -- Financial Reporting -- Interenterprise Arrears -- 2 Morphology of Government Accounting -- Commercial and Government Accounting -- Single- and Double-Entry Bookkeeping -- Cash and Accrual -- Terms and Definitions -- Why Accrual Now? -- Budget and Accounts -- Dimensions of the Issue -- General Ledger System -- Government Accounts and National Income Accounts -- Generational Accounts -- 3 Cost Measurement, Accounting Standards, and Other Issues -- Commercial Practices -- Government Approaches -- Relevance of Commercial Practices -- Capital Charge -- Foreign Aid Accounts -- Accounting Aspects of Privatization -- Accounting and Performance Indicators -- Other Issues -- Accounting Standards -- 4 Liability Management -- Payables -- Other Funded Liabilities -- Contingent Liabilities -- Unfunded Liabilities -- Legislated Guarantees -- Liabilities from Legislative Changes -- Hidden Liabilities -- Termination of Contracts -- Environmental Liabilities -- Market Failure Liabilities -- Debt Management -- Developments -- Continuing Objectives -- Organization -- Role of Accounting 125 -- 5 Architecture of Government Financial Information -- Importance of Financial Information -- Public and Private Sectors Compared -- Principles of Reporting -- Legitimacy -- Understandability -- Reliability.

This article examines the funding of two key components of state government total compensation: pensions and other postemployment benefits (OPEB), the latter consisting primarily of retiree health care. A brief overview of the economic, political, and legal environments of state pensions and OPEB is followed by an analysis of the unfunded liabilities for these respective benefits. Regression results suggest the importance of state management capacity, per capita income, and public employee density in understanding differences in the states' pension and OPEB funding performance. Additionally, employers' level of pension contributions, legislative professionalism, and fiscal constraint are significantly related to pension funding, while political ideology and levels of state pension funding are significantly related to OPEB funding. The article concludes by discussing the tensions that states face in attempting to balance the fiscal imperative of funding retiree benefits liabilities with the human capital challenge of attracting and retaining a professional workforce. Failure on either could be costly to state government.