A value-based assessment of alternative US state pension plans

Z. Lekniute, R.M.W.J. Beetsma, Eduard Ponds

Research output: Contribution to journalArticleScientificpeer-review

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.
Original languageEnglish
Pages (from-to)129-169
JournalJournal of Pension Economics and Finance
Volume17
Issue number2
DOIs
Publication statusPublished - Apr 2018

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U.S. States
Pension plans
Tax
Cohort
Indexation
Calibration
Stakeholders
Pension funds
Assets
Civil servants
Pensions
Investment allocation

Cite this

Lekniute, Z. ; Beetsma, R.M.W.J. ; Ponds, Eduard. / A value-based assessment of alternative US state pension plans. In: Journal of Pension Economics and Finance. 2018 ; Vol. 17, No. 2. pp. 129-169.
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A value-based assessment of alternative US state pension plans. / Lekniute, Z.; Beetsma, R.M.W.J.; Ponds, Eduard.

In: Journal of Pension Economics and Finance, Vol. 17, No. 2, 04.2018, p. 129-169.

Research output: Contribution to journalArticleScientificpeer-review

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