Governments are required to report the pension liabilities but do not have to accrue for them. If they did, they would blow their budgets.
One of the problems with public pensions is that if they are not managed well and funding is enforced, you get Detroit. As screwed up as New York is everywhere else, its public pension is one of the best funded in the country. It requires that its municipalities fund it properly. The problems with New York’s pension are that the expected returns are total bs at 7.5% per year, pension padding (where workers grab exorbitant overtime in their last three years of work to raise their final average salary which is what their pension is based on, and that most workers do not contribute to their pension, but the taxpayers do.
Defined benefit pensions have to be phased out because they are not sustainable by municipalities. The politicians make unsustainable deals with the unions that the taxpayers are on the hook for, but yet the taxpayer is not at the negotiating table when the contracts are signed.
Thanks for the info.
So, if they don’t accrue the expense for the pension liabilities, then they will be under funded. But, the point at which the SHTF will be years from now, so those currently managing the funds, or those in elective office overseeing all of this, don’t have to make any tough decisions today about this.