Business, Management and Accounting
8 years ago

Government officials cutting pension fund contributions, risking retirees' financial security.

˜The œGovernment accountants journal
Actuarial Options and Accounting Measurements
Martin Ives

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Governmental pension benefits are typically funded as they are earned through actuarially-determined contributions. However, officials may be tempted to reduce contributions to the pension fund to free up funds for other purposes. Actuarial decisions on investment earnings assumptions can significantly impact the required pension contributions, with even small changes having a big effect. The uncertainty of predicting investment earnings over the long term adds complexity to funding decisions.