Panel:
The Structure of Public Pensions: Costs, Contributions, and Consequences
(Public and Non-Profit Management and Finance)
Thursday, November 12, 2015: 8:30 AM-10:00 AM
Johnson II (Hyatt Regency Miami)
*Names in bold indicate Presenter
Panel Organizers: Robert Costrell, University of Arkansas
Panel Chairs: James Shuls, University of Missouri, St. Louis
Discussants: Martin West, Harvard University and Gema Zamarro, University of Arkansas
The structure of public sector pensions is hotly debated: should they remain of the traditional, defined benefit final-average-salary form (DB-FAS) or should they convert to one of the forms more common in the private sector -- defined contribution (DC) and defined benefit cash balance (DB-CB)? The issues in the debate include: (1) cost effectiveness; (2) contribution shortfalls; and (3) consequences for member behavior, as well as the distribution of benefits. This panel will have papers addressing each of these 3 C's. Specifically: (1) the cost effectiveness of DB vs. DC plans will be examined with new analyses of investment returns by plan type, annuitization, and costs of pension debt; (2) contribution plans based on the "80-percent-funding-is-good-enough" rationale will be mathematically examined for their steady-state implications; and (3) the consequences of incentives embedded in DB-FAS teacher pensions for late-career attrition will be examined empirically and, in another paper, the distributional consequences of recent pension reforms will be analyzed. All four papers will include policy implications.
