BackgroundThere is considerable controversy about the sustainability of public-sector retirement programs (public pension plans). The funded status of state and local government-sponsored pension plans is a major concern for the millions of public sector workers, retirees, and their family members who are the beneficiaries of those plans, as well as the current and future taxpayers who share in the financial obligation to provide those benefits.
Questions are being asked about public pension plans: Are public pension plans affordable for the taxpayers in the jurisdictions that provide such plans? How do public pension plans invest the funds set aside for retirement? Will the cash needed to cover pension obligations in the mature stages of a plan be available? As declining numbers of private-sector employees are able to participate in defined benefit plans, the proportion of taxpayers with direct knowledge of and experience with defined benefit pension plans also is decreasing—and the potential therefore grows for a rift in understanding between public-sector employees and the citizens they serve.
Academy Work in Public PlansThe American Academy of Actuaries has been actively exploring issues of concern to stakeholders in public pension plans. The information on this webpage is intended to help those interested in understanding the nature of these risks and the complex issues surrounding public pension plans, as well as learning more about public pension plans in general. We invite you to explore the materials presented here and encourage you to check back regularly for updates and additions, as the Academy continues its work in developing solutions to the challenges facing public pension plans' long-term viability.
Recent Academy Public Plans Statements