In a Hoover Institution Essay, Joshua Rauh describes the extent to which US states and communities under fund public sector pensions.
Even under states’ own disclosures and optimistic assumptions about future investment returns, assets in the pension systems will be insufficient to pay for the pensions of current public employees and retirees. Taxpayer resources will eventually have to make up the difference.
Despite the implementation of new Governmental Accounting Standards Board (GASB) guidelines, most public pension systems across the United States still calculate both their pension costs and liabilities under the assumption that their contributed assets will achieve returns of 7.5–8 percent per year.
But new GASB disclosures allow Rauh to estimate the size of the funding gap. He finds
unfunded accumulated benefits of $3.412 trillion under Treasury yield discounting. These are the unfunded debts that would be owed even if all plans froze their benefits at today’s promised levels.
In the NZZ, Michael Schaefer reports about a study that analyzes the portfolio composition of public sector entities and social security institutions. Cantons and the Federation mostly hold cash. The SNB’s portfolio is among the riskiest.
In the FT, Kerin Hope and Tony Barber portray left-wing members of the Greek Syriza government. These include:
Panayotis Lafazanis, minister for productive recovery, energy and the environment. He is quoted as saying “My way is no memorandum [Syriza’s term for the bailout agreement], no euro”.
Nikos Voutsis, minister for the interior and administrative reconstruction. He has reversed hiring restrictions; performance evaluation; wants to reinstate the municipal police force; and favors softer policing and more lenient treatment of prisoners.
Aristides Baltas, minister of culture and education. He is quoted as saying that education “should not be governed by the principle of excellence . . . it is a warped ambition.” He wants to eliminate restrictions on the duration of undergraduate studies; abolish university entrance exams; ban police from campuses; and grant students decisive powers to elect university officials.