Challenges in Pension Reform

CHALLENGES IN PENSION REFORM

A RESEARCH PROJECT SUBMITTED TO THE FACULTY OF NATIONAL UNIVERSITY IN PARTIAL FULFILLMENT OF THE REQUIREMENTS FOR THE DEGREE OF

MASTER OF PUBLIC ADMINISTRATION

NOVEMBER 2012

By
James Michael Sandburg

Capstone Project Faculty Advisor
Gary Geiler

CAPSTONE PROJECT APPROVAL FORM

I certify that I have read the Project of James Michael Sandburg entitled Challenges in Pension Reform, and that, in my opinion, it is satisfactory in scope and quality for the degree of Master of Public Administration at National University.

Approved by:

______________________________________________ ______________________
Gary Geiler Date

ABSTRACT The purpose of this study is to examine the challenges faced by public sector administrators as they grapple with restoring pension plans to solvency and sustainability. The objectives are to research and describe how public pension plans have become insolvent over the course of the past dozen years; to discuss legal issues that make reform difficult; to suggest how to involve unions in meeting the challenge of reforming pension plans through negotiation with collective bargaining units; to discuss how to achieve pension reform without violating constitutional and statutory protections; to suggest a means of paying off unfunded pension liabilities.
Unfunded public sector pension liabilities has become a nationwide problem, with total unfunded liabilities totaling between 1 and 5 trillion dollars, depending upon investment return assumptions.
Pension problems have plagued the City of San Diego, California, since the late 1990s. Pension reform became a key element in San Diego’s 2012 mayoral race. The prevailing candidate stood alone among three challengers, as the only one who seemed to recognize the depth of the legal implications of pension reform that will be discussed herein.
The idea has become widely held that implementing public pension reform is essential to

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