Understanding the Latest Developments in Pension Funding
During the 2023 Public Pension Funding Forum, researchers will discuss emerging funding solutions and strategies to improve the health of public pensions. The forum, held Aug. 20-22 in Chicago, provides attendees with practical insights into the latest pension research, including case studies that showcase emerging funding solutions.
By: Hank Kim, Executive Director and Counsel, NCPERS
Funding ratios—a simplistic metric used to assess the health of public pensions—are heavily favored in our summarize-on-a- bumper-sticker mentality, short attention span society. However, and precisely because it is simple, funding ratios only convey a one-dimensional, single point in time measurement and do not provide trends and other important context.
Relatedly, too many policymakers and the media take funding levels out of context by comparing a pension fund's underfunded amount – which is an aggregation of 30 years of projected shortfall – to a single year's revenue of its plan sponsor. As a result, the magnitude of unfunded liabilities is distorted. It stands to reason that failing to factor in revenues and funding that will be collected over the long periods during which benefits are paid would warp the math.
Not surprisingly, these faulty approaches produce flawed analysis and recommendations. Yet policymakers routinely rely on such distorted assessments of public pension health as the basis for devising sweeping reforms. Doing so has long-lasting implications for public-sector workers and their families. Over many years, policymakers have reduced public pension benefits, hiked employee contributions, and even closed plans to new hires on the basis of flawed and distorted analysis.
NCPERS recently published a Research Series paper that proposes five ways, including a few innovative ones, to assess the health of public pensions. During the 2023 Public Pension Funding Forum, researchers will further explore these methods and discuss emerging funding solutions and strategies to improve the health of public pensions.
The forum, held Aug. 20-22 in Chicago, provides attendees with practical insights into the latest pension research, including case studies that showcase emerging funding solutions. Attendees learn which pension reform initiatives have and haven't worked, while examining the short- and long-term effects that tweaking public pension benefits and formulas can have on public employees, stakeholders, communities, and the broader economy. Download the event brochure to learn more.
The Public Pension Funding Forum will kick off with a session on understanding crypto followed by a networking reception. The next morning, panelists will explore what drives pension reforms (and the politics that often surround them). Attendees will then hear from the Treasurer of North Carolina, Dale Folwell, and NYSTRS' executive director and CIO, Thomas Lee, about the factors that keep funding levels high in their respective systems. Later that day, Andy Blough and Seth Stock of the Indiana Public Retirement System will draw from their experiences to discuss how stabilizing funding contributes to improved fiscal health of pensions.
The next day, attendees will get the actuarial perspective on enhancing the health of public pension plans and hear about Fairfax County Retirement Systems' experience with applying the concept of Sustainability Valuation to the system. Following up on last month's webinar preview, leaders from BlackRock will then share insights from their annual Peer Risk Study. The program will conclude with an update from the Federal Reserve Bank of Atlanta's David Altig on the current economic outlook.
The event also features plenty of networking opportunities to promote building connections and sharing ideas. Early-bird pricing ends July 28, so don't wait to register for the Public Pension Funding Forum. If you have any questions, please email email@example.com.