Year of Publication
2024
College
Martin School of Public Policy and Administration
Date Available
10-9-2024
Degree Name
Master of Public Financial Management
Committee Member
John Foster
Advisor
Ronald Zimmer
Co-Director of Graduate Studies
Urton Anderson
Abstract
The U.S. is currently experiencing a public pension funding crisis that has become the topic of news outlets around the country and political talking points for legislators. It is estimated at the end of fiscal year 2023 that the average funded ratio for a public pension program is 78.1%, which equates to total unfunded pension liabilities for state retirement systems being approximately $1.4 trillion (Pension Plan Funded Ratio Rankings 2023, 2024). Pension systems across the U.S. are managed by boards and pension agencies that are charged with fiduciary responsibility to manage the pension funds in a manner that focuses on the best interest of the of the system’s members. A key component of a pension system’s management is the actuarial valuation report that is produced annually and presented to those with fiduciary responsibility to the systems. These reports drive the decision making for plan management by identifying what amount of funding will be required to meet future payment obligations. This paper will explore the actuarial valuation process and the role it plays in decision making by plan management. A historical analysis of funding and investment decisions made by plan managers of the five lowest funded pension systems in the U.S., as identified in the Pension Plan Funded Ratio Rankings for 2023 (Equable: January 2024), is also included to further document the actuarial role.
Recommended Citation
Montgomery, Samantha, "THE IMPACT OF ACTUARIAL VALUATION REPORTING ON STATE PENSION FUNDS" (2024). MPA/MPP/MPFM Capstone Projects. 446.
https://uknowledge.uky.edu/mpampp_etds/446
