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Monitoring the Risks to the U.S. Economy of Weaknesses in State and Local Government Finance

"The Municipal Financial Monitoring Team [of the Federal Reserve Banks of Cleveland and Atlanta] has been looking at how shocks to the municipal bond market, continued problems with pension funding, and general fiscal stress could ripple into something much larger—either in the form of a (rather unlikely) threat to financial stability or perhaps as an aggravation of regional economic woes. To understand these issues, the Monitoring Team has been exploring a number of areas where risks may be building."

Public Pension Funds and Public Finances

"Just how much should most Americans worry that some state and local governments could go into default? That's what a team of researchers from the Federal Reserve Banks of Cleveland and Atlanta has been studying over the past year. The Municipal Financial Monitoring Team has been looking at how shocks to the municipal bond market, continued problems with pension funding, and general fiscal stress could ripple into something much larger -- either in the form of a (rather unlikely) threat to financial stability or perhaps as an aggravation of regional economic woes."

Are Some Federal Employees Contributing Too Much to the Thrift Savings Plan?

"A Boston University professor and two researchers at the Federal Reserve Bank of Cleveland offered a heaping plate full of retirement-savings heresy in a recent paper.... [T]he authors say that because of the way the government taxes Social Security benefits, many people should consider limiting the amount of money they stow in tax-deferred programs."

Study Calls for 'Drastic Reform' of Public Pension Regulation

"Recent studies by the Harvard Kennedy School Mossavar-Rahmani Center and the Federal Reserve Bank of Cleveland prove all municipal and state pension funds eventually will run out of money without immediate radical reforms and 'huge' future tax increases.... What we end up with is public policy that hides trillions of dollars in debt, puts 27 million public workers and retirees at risk of poverty and actually encourages the risky, reckless behavior that caused this municipal and state pension crisis in the first place."

Navigating the Legal Landscape for Public Pension Reform

"In at least 27 states, pension members' past and future accruals are protected, but to different degrees ... [thereby complicating] the task of modifying current members' pension plans. These states treat public pension plans as contracts that must conform to constitutional, statutory, or common law (the last of these was developed through court decisions interpreting statutes or constitutions)."