Local government pension fund management and budget stability

Research output: Chapter in Book/Report/Conference proceedingChapter


Fluctuations in the financial market have introduced tremendous volatility into the financing of public pension plans, which in turn have a destabilizing effect on local government general fund budgets. In this chapter, we explore the reasons behind the volatility in pension financing and its countercyclical effect on local general fund budgets. More specifically, we examine three factors that jointly determine public pension financing: pension benefit design, pension contributions, and investment returns. Most importantly, we look at the effect of investment returns on employer pension contributions—which are financed by local government budgets. Solutions are then suggested as to how to mitigate this volatility in pension fi nuancing and its destabilizing effect on local government budgets.

Original languageEnglish (US)
Title of host publicationLocal Government Budget Stabilization
Subtitle of host publicationExplorations and Evidence
PublisherSpringer International Publishing
Number of pages20
ISBN (Electronic)9783319151861
ISBN (Print)9783319151854
StatePublished - Jan 1 2015

ASJC Scopus subject areas

  • General Social Sciences


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