Pension Basics: Paying the Pension Bill
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It is important that state and local governments pay at least 100% of their (ADC) each year. The ADC is based on assumptions about how […]
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Pension Basics: Actuarially Determined Contributions
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It is important that public sector pension funds receive adequate contributions each year in order to maintain a healthy funded status, or make progress on […]
Pension Basics: Unfunded Liabilities (aka Pension Debt)
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What are Unfunded Liabilities for Pension Plans? Pension plans are designed to collect contributions from active workers, invest that money to produce a return, and […]
Pension Basics: Normal Cost
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Normal cost is the contribution necessary, when added to investment income, to pay for benefits earned each year. The normal cost “prefunds” or “pays in […]
Pension Basics: Assumed Rate of Return
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Assumed rate of return is the single most important assumption that pension systems make to ensure they have enough funding to pay benefits promised. To […]
Pension Basics: The Pension Funding Formula
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How does a state, or the fund administering pension benefits, make sure it will be able to pay promised retirement income to public workers when […]
Pension Basics: Vesting
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If you’re like most public workers, you probably have to work five to seven years before you can qualify for any pension benefits — reaching […]
Pension Basics: How Pension Benefits Are Calculated
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Pension benefits are typically a fixed monthly payment in retirement that is guaranteed for life. Some pension benefits grow with inflation. Other pension benefits can […]