Public Pension Promises: How Big Are They and What Are They Worth?
We calculate the present value of state employee pension liabilities using discount rates that reflect the risk of the payments from a taxpayer perspective. If benefits have the same default and recovery characteristics as state general obligation debt, the national total of promised liabilities bas...
Gespeichert in:
| Veröffentlicht in: | The Journal of finance (New York) 2011-08, Vol.66 (4), p.1211-1249 |
|---|---|
| Hauptverfasser: | , |
| Format: | Artikel |
| Sprache: | eng |
| Schlagworte: | |
| Online-Zugang: | Volltext |
| Tags: |
Tag hinzufügen
Keine Tags, Fügen Sie den ersten Tag hinzu!
|
| container_end_page | 1249 |
|---|---|
| container_issue | 4 |
| container_start_page | 1211 |
| container_title | The Journal of finance (New York) |
| container_volume | 66 |
| creator | NOVY-MARX, ROBERT RAUH, JOSHUA |
| description | We calculate the present value of state employee pension liabilities using discount rates that reflect the risk of the payments from a taxpayer perspective. If benefits have the same default and recovery characteristics as state general obligation debt, the national total of promised liabilities based on current salary and service is $3.20 trillion. If pensions have higher priority than state debt, the value of liabilities is much larger. Using zero-coupon Treasury yields, which are default-free but contain other priced risks, promised liabilities are $4.43 trillion. Liabilities are even larger under broader concepts that account for salary growth and future service. |
| doi_str_mv | 10.1111/j.1540-6261.2011.01664.x |
| format | Article |
| fullrecord | <record><control><sourceid>jstor_proqu</sourceid><recordid>TN_cdi_proquest_miscellaneous_1021119990</recordid><sourceformat>XML</sourceformat><sourcesystem>PC</sourcesystem><jstor_id>29789814</jstor_id><sourcerecordid>29789814</sourcerecordid><originalsourceid>FETCH-LOGICAL-c5474-ca27222514f70481bdc9c5a275aed1c149c2e855937ef94908ebd5259ca5a3883</originalsourceid><addsrcrecordid>eNqNkE1LwzAYx4MoOF8-ghA8eWlN0qRNPCibOKeIDpwMvIQsy1xr18ykw-3bm1qZ4MnnkvD8X3j4AQAxinGY8yLGjKIoJSmOCcI4RjhNabzeAZ2tsAs6CBESYcTJPjjwvkDNMNYBveFqUuYaDk3lc1vBobOL3Bt_AQf2E_byN9h1Bo7mZgNVNYXjuap_N2Pr6vnVEdibqdKb45_3ELz0b0bXg-jh6fbuuvsQaUYzGmlFMkIIw3SWIcrxZKqFZmHJlJlijanQxHDGRJKZmaACcTOZMsKEVkwlnCeH4KztXTr7sTK-luFSbcpSVcauvMSIBCBCCBSsp3-shV25KlwnOWeUJyJpTLw1aWe9d2Ymly5fKLcJTbJhKwvZIJQNQtmwld9s5TpEL9voZ16azb9z8v6pf9d8Q8FJW1D42rptAREZFxw3etTqua_Neqsr9y7TLMmYHD_eysErz_r3g2c5Sr4AGs6U-Q</addsrcrecordid><sourcetype>Aggregation Database</sourcetype><iscdi>true</iscdi><recordtype>article</recordtype><pqid>885483930</pqid></control><display><type>article</type><title>Public Pension Promises: How Big Are They and What Are They Worth?</title><source>Jstor Complete Legacy</source><source>Wiley Online Library Journals Frontfile Complete</source><creator>NOVY-MARX, ROBERT ; RAUH, JOSHUA</creator><creatorcontrib>NOVY-MARX, ROBERT ; RAUH, JOSHUA</creatorcontrib><description>We calculate the present value of state employee pension liabilities using discount rates that reflect the risk of the payments from a taxpayer perspective. If benefits have the same default and recovery characteristics as state general obligation debt, the national total of promised liabilities based on current salary and service is $3.20 trillion. If pensions have higher priority than state debt, the value of liabilities is much larger. Using zero-coupon Treasury yields, which are default-free but contain other priced risks, promised liabilities are $4.43 trillion. Liabilities are even larger under broader concepts that account for salary growth and future service.</description><identifier>ISSN: 0022-1082</identifier><identifier>EISSN: 1540-6261</identifier><identifier>DOI: 10.1111/j.1540-6261.2011.01664.x</identifier><identifier>CODEN: JLFIAN</identifier><language>eng</language><publisher>Malden, USA: Blackwell Publishing Inc</publisher><subject>Accrued liabilities ; Actuarial liability ; Age ; Bank rates ; Cash flow ; Discount rates ; Employee pension plans ; Financial economics ; Financial liabilities ; Liabilities ; Liability ; Pension liabilities ; Pensions ; Public pensions ; Public sector ; Retirement ; Risk management ; State employees ; Studies ; Treasuries ; Treasury bills ; U.S.A ; Yield curves</subject><ispartof>The Journal of finance (New York), 2011-08, Vol.66 (4), p.1211-1249</ispartof><rights>2011 The American Finance Association</rights><rights>2011 the American Finance Association</rights><rights>Copyright Blackwell Publishers Inc. Aug 2011</rights><lds50>peer_reviewed</lds50><oa>free_for_read</oa><woscitedreferencessubscribed>false</woscitedreferencessubscribed><citedby>FETCH-LOGICAL-c5474-ca27222514f70481bdc9c5a275aed1c149c2e855937ef94908ebd5259ca5a3883</citedby><cites>FETCH-LOGICAL-c5474-ca27222514f70481bdc9c5a275aed1c149c2e855937ef94908ebd5259ca5a3883</cites></display><links><openurl>$$Topenurl_article</openurl><openurlfulltext>$$Topenurlfull_article</openurlfulltext><thumbnail>$$Tsyndetics_thumb_exl</thumbnail><linktopdf>$$Uhttps://www.jstor.org/stable/pdf/29789814$$EPDF$$P50$$Gjstor$$H</linktopdf><linktohtml>$$Uhttps://www.jstor.org/stable/29789814$$EHTML$$P50$$Gjstor$$H</linktohtml><link.rule.ids>314,776,780,799,1411,27901,27902,45550,45551,57992,58225</link.rule.ids></links><search><creatorcontrib>NOVY-MARX, ROBERT</creatorcontrib><creatorcontrib>RAUH, JOSHUA</creatorcontrib><title>Public Pension Promises: How Big Are They and What Are They Worth?</title><title>The Journal of finance (New York)</title><description>We calculate the present value of state employee pension liabilities using discount rates that reflect the risk of the payments from a taxpayer perspective. If benefits have the same default and recovery characteristics as state general obligation debt, the national total of promised liabilities based on current salary and service is $3.20 trillion. If pensions have higher priority than state debt, the value of liabilities is much larger. Using zero-coupon Treasury yields, which are default-free but contain other priced risks, promised liabilities are $4.43 trillion. Liabilities are even larger under broader concepts that account for salary growth and future service.</description><subject>Accrued liabilities</subject><subject>Actuarial liability</subject><subject>Age</subject><subject>Bank rates</subject><subject>Cash flow</subject><subject>Discount rates</subject><subject>Employee pension plans</subject><subject>Financial economics</subject><subject>Financial liabilities</subject><subject>Liabilities</subject><subject>Liability</subject><subject>Pension liabilities</subject><subject>Pensions</subject><subject>Public pensions</subject><subject>Public sector</subject><subject>Retirement</subject><subject>Risk management</subject><subject>State employees</subject><subject>Studies</subject><subject>Treasuries</subject><subject>Treasury bills</subject><subject>U.S.A</subject><subject>Yield curves</subject><issn>0022-1082</issn><issn>1540-6261</issn><fulltext>true</fulltext><rsrctype>article</rsrctype><creationdate>2011</creationdate><recordtype>article</recordtype><recordid>eNqNkE1LwzAYx4MoOF8-ghA8eWlN0qRNPCibOKeIDpwMvIQsy1xr18ykw-3bm1qZ4MnnkvD8X3j4AQAxinGY8yLGjKIoJSmOCcI4RjhNabzeAZ2tsAs6CBESYcTJPjjwvkDNMNYBveFqUuYaDk3lc1vBobOL3Bt_AQf2E_byN9h1Bo7mZgNVNYXjuap_N2Pr6vnVEdibqdKb45_3ELz0b0bXg-jh6fbuuvsQaUYzGmlFMkIIw3SWIcrxZKqFZmHJlJlijanQxHDGRJKZmaACcTOZMsKEVkwlnCeH4KztXTr7sTK-luFSbcpSVcauvMSIBCBCCBSsp3-shV25KlwnOWeUJyJpTLw1aWe9d2Ymly5fKLcJTbJhKwvZIJQNQtmwld9s5TpEL9voZ16azb9z8v6pf9d8Q8FJW1D42rptAREZFxw3etTqua_Neqsr9y7TLMmYHD_eysErz_r3g2c5Sr4AGs6U-Q</recordid><startdate>201108</startdate><enddate>201108</enddate><creator>NOVY-MARX, ROBERT</creator><creator>RAUH, JOSHUA</creator><general>Blackwell Publishing Inc</general><general>Wiley Subscription Services</general><general>Blackwell Publishers Inc</general><scope>BSCLL</scope><scope>AAYXX</scope><scope>CITATION</scope><scope>8BJ</scope><scope>FQK</scope><scope>JBE</scope></search><sort><creationdate>201108</creationdate><title>Public Pension Promises: How Big Are They and What Are They Worth?</title><author>NOVY-MARX, ROBERT ; RAUH, JOSHUA</author></sort><facets><frbrtype>5</frbrtype><frbrgroupid>cdi_FETCH-LOGICAL-c5474-ca27222514f70481bdc9c5a275aed1c149c2e855937ef94908ebd5259ca5a3883</frbrgroupid><rsrctype>articles</rsrctype><prefilter>articles</prefilter><language>eng</language><creationdate>2011</creationdate><topic>Accrued liabilities</topic><topic>Actuarial liability</topic><topic>Age</topic><topic>Bank rates</topic><topic>Cash flow</topic><topic>Discount rates</topic><topic>Employee pension plans</topic><topic>Financial economics</topic><topic>Financial liabilities</topic><topic>Liabilities</topic><topic>Liability</topic><topic>Pension liabilities</topic><topic>Pensions</topic><topic>Public pensions</topic><topic>Public sector</topic><topic>Retirement</topic><topic>Risk management</topic><topic>State employees</topic><topic>Studies</topic><topic>Treasuries</topic><topic>Treasury bills</topic><topic>U.S.A</topic><topic>Yield curves</topic><toplevel>peer_reviewed</toplevel><toplevel>online_resources</toplevel><creatorcontrib>NOVY-MARX, ROBERT</creatorcontrib><creatorcontrib>RAUH, JOSHUA</creatorcontrib><collection>Istex</collection><collection>CrossRef</collection><collection>International Bibliography of the Social Sciences (IBSS)</collection><collection>International Bibliography of the Social Sciences</collection><collection>International Bibliography of the Social Sciences</collection><jtitle>The Journal of finance (New York)</jtitle></facets><delivery><delcategory>Remote Search Resource</delcategory><fulltext>fulltext</fulltext></delivery><addata><au>NOVY-MARX, ROBERT</au><au>RAUH, JOSHUA</au><format>journal</format><genre>article</genre><ristype>JOUR</ristype><atitle>Public Pension Promises: How Big Are They and What Are They Worth?</atitle><jtitle>The Journal of finance (New York)</jtitle><date>2011-08</date><risdate>2011</risdate><volume>66</volume><issue>4</issue><spage>1211</spage><epage>1249</epage><pages>1211-1249</pages><issn>0022-1082</issn><eissn>1540-6261</eissn><coden>JLFIAN</coden><abstract>We calculate the present value of state employee pension liabilities using discount rates that reflect the risk of the payments from a taxpayer perspective. If benefits have the same default and recovery characteristics as state general obligation debt, the national total of promised liabilities based on current salary and service is $3.20 trillion. If pensions have higher priority than state debt, the value of liabilities is much larger. Using zero-coupon Treasury yields, which are default-free but contain other priced risks, promised liabilities are $4.43 trillion. Liabilities are even larger under broader concepts that account for salary growth and future service.</abstract><cop>Malden, USA</cop><pub>Blackwell Publishing Inc</pub><doi>10.1111/j.1540-6261.2011.01664.x</doi><tpages>39</tpages><oa>free_for_read</oa></addata></record> |
| fulltext | fulltext |
| identifier | ISSN: 0022-1082 |
| ispartof | The Journal of finance (New York), 2011-08, Vol.66 (4), p.1211-1249 |
| issn | 0022-1082 1540-6261 |
| language | eng |
| recordid | cdi_proquest_miscellaneous_1021119990 |
| source | Jstor Complete Legacy; Wiley Online Library Journals Frontfile Complete |
| subjects | Accrued liabilities Actuarial liability Age Bank rates Cash flow Discount rates Employee pension plans Financial economics Financial liabilities Liabilities Liability Pension liabilities Pensions Public pensions Public sector Retirement Risk management State employees Studies Treasuries Treasury bills U.S.A Yield curves |
| title | Public Pension Promises: How Big Are They and What Are They Worth? |
| url | https://sfx.bib-bvb.de/sfx_tum?ctx_ver=Z39.88-2004&ctx_enc=info:ofi/enc:UTF-8&ctx_tim=2025-02-13T01%3A22%3A41IST&url_ver=Z39.88-2004&url_ctx_fmt=infofi/fmt:kev:mtx:ctx&rfr_id=info:sid/primo.exlibrisgroup.com:primo3-Article-jstor_proqu&rft_val_fmt=info:ofi/fmt:kev:mtx:journal&rft.genre=article&rft.atitle=Public%20Pension%20Promises:%20How%20Big%20Are%20They%20and%20What%20Are%20They%20Worth?&rft.jtitle=The%20Journal%20of%20finance%20(New%20York)&rft.au=NOVY-MARX,%20ROBERT&rft.date=2011-08&rft.volume=66&rft.issue=4&rft.spage=1211&rft.epage=1249&rft.pages=1211-1249&rft.issn=0022-1082&rft.eissn=1540-6261&rft.coden=JLFIAN&rft_id=info:doi/10.1111/j.1540-6261.2011.01664.x&rft_dat=%3Cjstor_proqu%3E29789814%3C/jstor_proqu%3E%3Curl%3E%3C/url%3E&disable_directlink=true&sfx.directlink=off&sfx.report_link=0&rft_id=info:oai/&rft_pqid=885483930&rft_id=info:pmid/&rft_jstor_id=29789814&rfr_iscdi=true |