Unfunded Public Pension Liabilities and Citizen Oversight

• In Event: Hot Buffet Breakfast & Round Table Discussions
  In Paper Session: Round Table Discussions

Abstract

We examine whether unfunded pension liabilities are associated with citizen oversight in local governments. Our focus on local government pension plans is timely and relevant, given the prevalence of unfunded pension plans and GASB’s proposals on state and local pension reporting. Using a sample of 713 observations from 173 municipalities between 2001 and 2005, we find evidence that unfunded pension liabilities are positively associated with municipal recall attempts and negatively associated with provisions allowing direct citizen participation in the legislative process. Overall, our empirical evidence is consistent with citizen oversight mechanisms playing an important role in the pension funding decisions of local government.

Authors

• Kevin T Rich, Marquette University

• Jean Xueqing Zhang, Virginia Commonwealth University