MATH Briefing - 1st Quarter 2015: Public Sector Pensions: Challenges and Opportunities

March 19, 2015

12:15pm - 1:30pm

MATH (Markets And The Hill) Briefing Series
Capitol Hill, Washington, D.C.
By invitation only


At the end of 2014 the Federal Reserve Board reported "unfunded defined benefit pension entitlements" of $1.29 trillion dollars for the defined benefit (DB) plans of state and local governments. The situation hasn't always looked so dire: the majority of DB plan funding comes from investment earnings, which led many of these plans to be overfunded in the 1990s and to lose much of their value in the 2008 financial crisis. While there are spirited disagreements about the true size of pension obligations, many economists believe that the value of promised benefits (plan liabilities) exceeds the fair value of assets the plans hold by a significant amount. Changes by the Government Accounting Standards Board are underway. As many government pension plans continue to struggle, we expect to see further efforts to reform them.

This briefing will address (1) the current state of pensions for state and local government employees, (2) the challenges these pension plans face in the medium to long term, and (3) federal regulatory developments aimed at this issue.


Sandeep Dahiya is an Associate Professor of Finance at Georgetown University's McDonough School of Business. He is also an Associate Director of the Center for Financial Markets and Policy. Professor Dahiya's research focuses on corporate finance, corporate restructuring, entrepreneurial finance, banking and financial institutions. His work has been published in numerous finance journals, including the Journal of Finance, Review of Financial Studies, Journal of Financial Economics, Journal of Business, Journal of Corporate Finance, and Journal of Banking and Finance. Professor Dahiya spent two years working in the corporate finance and strategy practice of McKinsey & Company, a leading strategy consulting firm. He has also consulted for leading law firms on corporate finance issues. Before earning his Ph.D., he spent three years with ICICI Bank, the second-largest financial institution in India. Dr. Dahiya received a bachelor's degree and M.B.A. from the Indian Institute of Technology and his Ph.D. in finance from New York University.

Eileen Norcross is a senior research fellow at the Mercatus Center at George Mason University. As director for the Mercatus Center's State and Local Policy Project, she focuses on questions of public finance and how economic institutions support or hamper economic resiliency and civil society. She specializes in fiscal federalism and institutions, state and local governments and finance, pensions, public administration, and economic development. Previously, Norcross was a Warren T. Brookes Journalism Fellow at the Competitive Enterprise Institute in Washington, D.C.; a consultant at KPMG's transfer-pricing division; and a research analyst with Thompson Financial Securities Data. She received both her M.A. in economics and her B.A. in economics and American history from Rutgers University.

Diane Oakley is Executive Director of the National Institute on Retirement Security and leads the organization's research, education, and strategic planning initiatives. Before joining NIRS in 2011, Ms. Oakley worked on Capitol Hill, where she played a key staff role in formulating legislative strategy on a range of pension, tax, Social Security, financial services, and workforce issues. Ms. Oakley also held leadership positions with TIAA-CREF, a leading financial services provider. During her 28-year tenure with the organization, she held a number of management, public policy, and technical positions. She began as an actuarial assistant and was promoted to positions including vice president for special consulting services and vice president for associations and government relations. She holds a B.S. in mathematics from Fairfield University and an M.B.A. in finance from Fordham University. She is a member of the National Academy of Social Insurance.

Nicholas Stanojev is the Managing Director and Head of U.S. Funds at BNY Mellon. In this role, he is responsible for asset management sales, sales management and marketing through multiple distribution channels and market segments. Prior to BNY Mellon, he served as the Director of U.S. Public Fund and Taft-Hartley Sales at State Street Global Advisors. Mr. Stanojev also worked for nearly 20 years in institutional investment sales at Putnam Investments, where he served as managing director and senior account manager for Putnam global institutional management. Prior to that, he served as senior vice president for institutional defined contribution sales, and vice president of institutional sales at Putnam. He holds a bachelor's degree in finance and marketing from Pennsylvania State University.

For more information, please contact: Dianna Dunne, Director of Government Affairs, Milken Institute at