Designed to bring some reasoned analysis into the increasingly heated debate over the fate of public pension funds, a new book by Alicia H. Munnell, director of the Center for Retirement Research at Boston College, is due out Sept. 17.
“State and Local Pensions: What Now?” looks at what the author calls the “big and complicated story” of state and local pensions over the last three decades to see how the pension systems got into their current — mostly underfunded — situations and the possible measures for getting them out.
Ms. Munnell argues that even as pensions get blamed as major causes in municipal bankruptcies and politicians grapple with unpopular benefit cuts, “most plans face a management challenge, not a crisis.” Her vantage point as an academic researcher allows Ms. Munnell to tackle sensitive questions, including whether public pensions are too generous, whether discount rates used to calculate benefit obligations should change, and how much defined contribution plans can help.
Ms. Munnell uses Rhode Island's pension reform process in 2011 as a case study for dealing with severely underfunded systems, where reform efforts “should fairly distribute the pain among employers, current and future employees, retirees and taxpayers.”
The book is published by Brookings Institution Press.