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What Does It Cost To Make Unfunded Liabilities Fiscally Sustainable?
A conversation between NCPERS executive director and counsel, Hank H. Kim, and NCPERS director of research, Michael Kahn, Ph.D. about NCPERS new research, Enhancing Sustainability of Public Pensions.
What Does It Cost To Make Unfunded Liabilities Fiscally Sustainable?
[A conversation between NCPERS executive director and counsel, Hank H. Kim, and NCPERS director of research, Michael Kahn, Ph.D. about NCPERS new research, Enhancing Sustainability of Public Pensions].
NCPERS Executive Director, Hank H. Kim: Michael, what would it cost to make unfunded liabilities fiscally sustainable?
NCPERS Director of Research, Michael Kahn Ph.D.: We looked at each state what would it take to keep the ratio between unfunded liabilities and local economies stable; we calculated how much money if the ratio is not stable. We added that it's about $141 million, as of 2018. Which is the latest data available. This number might be lower now because of the increased market gains last year. In terms of magnitude, it's a lot of money, it was only about 3% of total unfunded liabilities in 2018. Which means, if the unfunded liability in 2018 of all 5,320 pension plans, was about 3% lower it would have been sustainable, according to the economy of 50 states.
In the coming weeks, NCPERS will release videos between Kim and Kahn discussing different aspects of Enhancing Sustainability of Public Pensions. You can view our previous videos: Why Do We Use A 30-Year Time Horizon?; What Is The Difference Between Sustainability Valuation & Actuarial Valuation?; Sustainability Valuation And Actuarial Valuation; How Can We Enhance Sustainability Of Public Pensions? What Do We Mean By Sustainability Valuation?.
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