Released: September 05, 2008

Revisions weighed for pension fund payouts

Source: David Cho, Washington Post (Free Registration)

The leading U.S. association of actuaries is considering a change to the way state and local officials value the cost of their pension promises, which could force governments to dramatically raise their contributions to their retirement plans.

The American Academy of Actuaries heard testimony yesterday on whether to revise accounting methods used by public pension funds that determine how much money they must invest now to meet their payments to workers in the future. Some economists said the current practices, which use optimistic assumptions that are not permitted in the private sector, allow public pensions to understate the cost of the future payouts.

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