How we manage public funds has tremendous impact on the overall growth of the U.S. economy affecting virtually every American citizen. Retirement funds, whether public pensions or social security, require astute financial administration of the public revenues and expenditures to ensure long-term sustainability in the management of public needs. CAUS is concerned about the financial sustainability of our nations social insurance programs and our ability to deliver on the promises made to plan beneficiaries.
“State pension plans are entrusted with $3 trillion in public funds and face the challenge of a $1 trillion gap in the amount needed to pay for pension promises.”
Source: Pew Charitable Trusts, February 2016, The Transparency That Public Pensions Need - Pension investments are increasingly complex, but disclosure standards have not kept pace
Public pension plans in the U.S. are severely underfunded at the present time, despite the fact that they were relatively well funded at the beginning of this century. When PPP accrued benefit liabilities are valued using risk-free (US Treasury) rates to discount future benefit payments – a solvency measure preferred by financial economists to determine the security of benefits earned to date - the estimated underfunding as of June 30, 2016 was over $5 trillion, and the estimated funded ratio was approximately 40%.