Legacy debt in public pensions

Aubry, Jean-Pierre. “Legacy debt in public pensions”. State and Local Pension Plans 84, Chestnut Hill, Mass.: Center for Retirement Research at Boston College, June 2022. http://hdl.handle.net/2345/bc-ir:109480.
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Abstract

The brief's key findings are: (1) The inclusion of "legacy debt" -- unfunded liabilities from long ago -- with current liabilities impedes effective pension policy. (2) A new approach would separate legacy debt from other unfunded liabilities in order to: (i) spread the legacy cost over multiple generations; and (ii) properly identify fixed vs. variable costs. (3) It would also use the municipal bond yield -- rather than the assumed return on assets -- to calculate liabilities and required contributions. (4) This approach, by properly allocating costs, would improve intergenerational fairness, government resource decisions, and public credibility.

Title
Legacy debt in public pensions: A new approach
Author
Aubry, Jean-Pierre
Center
Center for Retirement Research
Genre
report
Date Issued
June 2022
Publisher
Center for Retirement Research at Boston College
Series Title
State and Local Pension Plans
Series Number
84
Persistent Link
http://hdl.handle.net/2345/bc-ir:109480
Use Restrictions
These materials are made available for use in research, teaching and private study, pursuant to U.S. Copyright Law. The user must assume full responsibility for any use of the materials, including but not limited to, infringement of copyright and publication rights of reproduced materials. Any materials used for academic research or otherwise should be fully credited with the source. The publisher or original authors may retain copyright to the materials.
Subject
State and Local Pensions

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