Product details

By continuing to use our site you consent to the use of cookies as described in our privacy policy unless you have disabled them.
You can change your cookie settings at any time but parts of our site will not function correctly without them.
Published by: Harvard Business Publishing
Originally published in: 2011
Version: 19 September 2011
Length: 19 pages
Data source: Published sources

Abstract

This case describes the precarious fiscal situation of the Illinois public pension system in the spring of 2009 and the accounting of pension plans by non-federal municipalities more generally. In February 2009, in the midst of a recession, recently appointed Governor Quinn had to lay out his budget for the coming fiscal year and tackle the state's underfunded public pension, its largest liability. Immediately, the governor needed to raise funds to make the state's annual contribution to the pension plan, and at the same time he needed to come up with a plan for pension reform to prevent the future insolvency of the state. Governor Quinn had a number of levers he could employ, including changing the asset allocation of the pension funds; directly tackling entitlements through a defined benefit or defined contribution plan; or implementing a package of pension bonds, taxes, and employee contributions. Through this case, students should more fully understand pension accounting and the hard choices that many states will face because of their outstanding pension liabilities.
Other setting(s):
2009-2010

About

Abstract

This case describes the precarious fiscal situation of the Illinois public pension system in the spring of 2009 and the accounting of pension plans by non-federal municipalities more generally. In February 2009, in the midst of a recession, recently appointed Governor Quinn had to lay out his budget for the coming fiscal year and tackle the state's underfunded public pension, its largest liability. Immediately, the governor needed to raise funds to make the state's annual contribution to the pension plan, and at the same time he needed to come up with a plan for pension reform to prevent the future insolvency of the state. Governor Quinn had a number of levers he could employ, including changing the asset allocation of the pension funds; directly tackling entitlements through a defined benefit or defined contribution plan; or implementing a package of pension bonds, taxes, and employee contributions. Through this case, students should more fully understand pension accounting and the hard choices that many states will face because of their outstanding pension liabilities.

Settings

Other setting(s):
2009-2010

Related