Abstract
State governments are frequently said to manipulate the discount rate assumption to make pension funding look better, reduce employers' and employees' pension contributions, or relieve fiscal stress. Building a model from the political embeddedness perspective and applying an event history analysis to the 81 largest state-administered pension plans in the United States, the authors found that more politically embedded pension boards were actually more likely to reduce their plan's discount rate. Public union coverage and government political ideology, however, had no significant impact on discount rate changes. These findings reveal the effect of political embeddedness on pension planning decisions and provide useful insights into the intricate process of setting pension discount rates in a new era of more muted investment return expectations. This article points to both political and financial pressures facing pension boards and state governments for many years to come.
| Original language | English (US) |
|---|---|
| Journal | Public Administration Review |
| DOIs | |
| State | Accepted/In press - Jan 1 2018 |
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ASJC Scopus subject areas
- Sociology and Political Science
- Public Administration
- Marketing
Cite this
Political Embeddedness of Public Pension Governance : An Event History Analysis of Discount Rate Changes. / Wang, Qiushi; Peng, Jun.
In: Public Administration Review, 01.01.2018.Research output: Contribution to journal › Article
}
TY - JOUR
T1 - Political Embeddedness of Public Pension Governance
T2 - An Event History Analysis of Discount Rate Changes
AU - Wang, Qiushi
AU - Peng, Jun
PY - 2018/1/1
Y1 - 2018/1/1
N2 - State governments are frequently said to manipulate the discount rate assumption to make pension funding look better, reduce employers' and employees' pension contributions, or relieve fiscal stress. Building a model from the political embeddedness perspective and applying an event history analysis to the 81 largest state-administered pension plans in the United States, the authors found that more politically embedded pension boards were actually more likely to reduce their plan's discount rate. Public union coverage and government political ideology, however, had no significant impact on discount rate changes. These findings reveal the effect of political embeddedness on pension planning decisions and provide useful insights into the intricate process of setting pension discount rates in a new era of more muted investment return expectations. This article points to both political and financial pressures facing pension boards and state governments for many years to come.
AB - State governments are frequently said to manipulate the discount rate assumption to make pension funding look better, reduce employers' and employees' pension contributions, or relieve fiscal stress. Building a model from the political embeddedness perspective and applying an event history analysis to the 81 largest state-administered pension plans in the United States, the authors found that more politically embedded pension boards were actually more likely to reduce their plan's discount rate. Public union coverage and government political ideology, however, had no significant impact on discount rate changes. These findings reveal the effect of political embeddedness on pension planning decisions and provide useful insights into the intricate process of setting pension discount rates in a new era of more muted investment return expectations. This article points to both political and financial pressures facing pension boards and state governments for many years to come.
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U2 - 10.1111/puar.12968
DO - 10.1111/puar.12968
M3 - Article
AN - SCOPUS:85050588155
JO - Public Administration Review
JF - Public Administration Review
SN - 0033-3352
ER -