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The Intergenerational Transfer of Public Pension Promises / Robert Novy-Marx, Joshua D. Rauh.
- Format:
- Book
- Author/Creator:
- Novy-Marx, Robert.
- Series:
- Working Paper Series (National Bureau of Economic Research) no. w14343.
- NBER working paper series no. w14343
- Language:
- English
- Physical Description:
- 1 online resource: illustrations (black and white);
- Place of Publication:
- Cambridge, Mass. National Bureau of Economic Research 2008.
- Summary:
- The value of pension promises already made by US state governments will grow to approximately $7.9 trillion in 15 years. We study investment strategies of state pension plans and estimate the distribution of future funding outcomes. We conservatively predict a 50% chance of aggregate underfunding greater than $750 billion and a 25% chance of at least $1.75 trillion (in 2005 dollars). Adjusting for risk, the true intergenerational transfer is substantially larger. Insuring both taxpayers against funding deficits and plan participants against benefit reductions would cost almost $2 trillion today, even though governments portray state pensions as almost fully funded.
- Notes:
- Print version record
- September 2008.
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