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Public pension plans in the United States have a long and successful track record at maintaining the pension promise according to a new study by the National Conference on Public Employee Retirement Systems (NCPERS), writes Rob Kozlowski fop Pensions & Investments.
As such, attempts to close or freeze plans that are less than 100 per cent fully funded are misguided says the NCPERS, he writes.
The study went on to say that “full funding of public pensions (to 100 per cent) is not only a misguided goal but a waste of taxpayer money.”
“Our analysis demonstrates that pension plans can tolerate ups and downs in the market and still meet their current obligations,” Hank H. Kim, executive director and counsel of NCPERS, is quoted saying. “While funding ratios are an important actuarial tool, they are not a proxy for a plan’s ability to pay benefits here and now.”
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