The unique regulation of U.S. public pension funds links their liability discount rate to the expected return on assets, which gives them incentives to invest more in risky assets in order to report a better funding status. Comparing public and private pension funds in the United States, Canada,...

Written as a contribution to the Long Finance Meta-Commerce programme, this paper examines the way that discount rates are used for the evaluation and management of pension schemes.The authors describe the role and function of a discount rate, and critique the methods presently in use for...

This paper addresses two issues regarding public pension funds. First, we examine what should be the appropriate rate at which to discount the liabilities of a public pension plan. We argue that a risk-free U.S. Treasury rate is an inappropriate discount rate for state pension funds. Public...

Over 85% U.S. firms set their pension discount rates higher than benchmark rates, particularly when interest rates fall. This paper offers explanations to this phenomenon --- mandatory contributions to underfunded pensions constrain corporate investments, thus a relaxation of such constraint...