Jan 1, 1980
Provides basic data about the financial condition of teacher retirement systems (TRS), reviews methods for assessing them, discusses empirical problems that hamper assessment, and suggests lines of research for improving assessment. Most empirical problems would disappear if TRS promised benefits on the basis of actual contributions made by employee and employer, instead of "defined benefits" requiring long-term assumptions about variables that are difficult to forecast. Lacking more accurate measures, the report uses balance-sheet, debt-related, and ability-to-pay indicators to assess financial health. States most likely to face problems are those that have large pension and market debts in relation to market value of property and revenue-raising capacity, are slow-growing, have declining enrollments, make automatic cost-of-living adjustments in benefits, and have state or local fiscal limitations on expenditures or taxes.