Working Paper

Do public pension obligations affect state funding costs?

Abstract: States? unfunded pension obligations to their current and retired employees have exploded in recent years to levels that are estimated to be between $750 billion and $4.4 trillion. In theory, this massive debt should have implications for states? ability to meet their financial obligations and a measurable impact on funding costs. Yet, we find no evidence that municipal bond markets are pricing the risks to states? fiscal health arising from these large obligations.

Keywords: Pensions; Local finance;

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Bibliographic Information

Provider: Federal Reserve Bank of Cleveland

Part of Series: Working Papers (Old Series)

Publication Date: 2014-07-01

Number: 1301

Pages: 31 pages