Economic Expansion Doesn’t Help Underfunded Public Pension Plans

The video discusses the challenges in pension funding, focusing on optimistic actuarial assumptions and high discount rates. It highlights the lack of clear understanding among stakeholders and the impact of lowering discount rates on pension liabilities. The discussion also covers the future outlook, noting limited progress despite economic expansion and reforms.

What is one of the main reasons for the lack of pension funding during economic expansion?

• Optimistic actuarial assumptions

• Decreased tax revenue

• High inflation rates

• Increased retirement age

How does lowering the discount rate affect pension liabilities?

• It doubles the liabilities

• It has no effect on the liabilities

• It triples the liabilities

• It decreases the liabilities

What discount rate does the Federal Reserve use that is mentioned in the video?

• Closer to a C bond rating

• Closer to a BB bond rating

• Closer to a D bond rating

• Closer to a AAA bond rating

What is the speaker's outlook on the funded ratios for pensions in the next five to ten years?

• Very optimistic

• Somewhat optimistic

• Neutral

• Not optimistic

Despite economic growth, what has been the trend in funded ratios over the past decade?

• They have remained the same

• They are lower than ten years ago

• They have significantly improved

• They have slightly improved