This paper examines the possible causes of the nationwide unfunded public pension liability problem in the U.S., and what solutions are being proposed to combat the issue. After examining the general problems associated with multiple states’ pension systems, a specific analysis of the Rhode Island public pension system will be conducted. Through this investigation, the factors that led to the crisis in Rhode Island will be unveiled, and possible solutions to the state-specific problem will be developed. In order to arrive at a set of final recommendations for the government, a model will be used to evaluate the effects of different recommendations on their ability to decrease the unfunded liability’s outstanding sum. This model will have both qualitative and quantitative factors included. The qualitative section will evaluate the possible positive and negative effects of the proposals, while the quantitative section will try to predict the possible monetary and fiscal effects the solutions will have on the outstanding liability. Finally I conclude with a set of solid analytical and statistical recommendations that can be taken to the government of Rhode Island in hopes of being considered for future implementation.
Recommended CitationBlunt, Derek, "Possible Solutions to the Rhode Island State Government’s Unfunded Pension Liability" (2010). Honors Projects in Finance. Paper 9.