Forget The Phony Pension Accounting, Here's How Much Your State Pension Is Really Underfunded
The phony assumptions that go into calculating public pension underfundings in the United States are a frequent topic for us. As our readers are aware, state pension administrators are given fairly wide leeway to simply pick a discount rate out of thin air. Of course, since pensions are nothing but a massive stream of future liabilities that stretch out into perpetuity, every 100 bps increase can substantially, and artificially, lower the fund's reported underfunded level.