Wharton Pension Research Council Working Papers

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Working Paper

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State and local U.S. pension plans hold an estimated $3 trillion in assets, with market values regularly disclosed in plan financial statements. By contrast, public defined benefit pension liabilities are routinely reported at actuarial values which may differ substantially from market values. We propose that a more accurate way to value plan liabilities measures the present value of accrued benefits discounted at market interest rates for fixed income investments that are (or are nearly) default-free. We illustrate the difference between these measures for a set of public sector pensions using publicly available information.


The published version of this Working Paper may be found in the 2009 publication: The Future of Public Employee Retirement Systems.

Working Paper Number


Copyright/Permission Statement

© 2008 Pension Research Council of the Wharton School of the University of Pennsylvania. All rights reserved.


Opinions and errors are solely those of the authors and not of the institutions with whom the authors are affiliated. This research was presented at the 2008 Pension Research Council Symposium.

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Economics Commons



Date Posted: 07 August 2019