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Event Summary

Public pension funding has become a heated policy issue, three experts revealed at a lunch event at AEI on Thursday, approaching the complicated topic from different perspectives. Amy Monahan, a professor of law at the University of Minnesota, shared the legal context of public pension reform, which, unlike private pensions, is under state rather than federal jurisdiction. She highlighted that differing interpretations of pension agreements across states lead to varying levels of reform opportunities within each state.

Economist Kent Smetters of the University of Pennsylvania and actuary Paul Angelo of the Segal Company then debated the valuation practices of public pension liabilities. Smetters criticized the current valuation practice, which takes into account expected returns on pension assets and places the risk of long-term investment on taxpayers. He argued for a fair-market valuation of public pension liabilities, which would use a lower discount rate because pension benefits must be paid regardless of investment performance.

Angelo defended the current valuation process, which provides information on the expected costs associated with funding future benefits based on both current information and actuarially reasonable expectation of future events. He argued that the market approach overstates liabilities and would unnecessarily burden current taxpayers.

–Brittany Pineros

Event Description

Pension underfunding has dominated the media and created significant concerns for state lawmakers as they struggle to bring their fiscal houses in order. Before any reforms can be enacted, certain questions must be answered: in reality, how large are the funding shortfalls, and what are the legal boundaries within which reforms can take place?

At this event, panelists will address pension reform challenges by presenting the results of three research papers commissioned by AEI through a generous grant from the Smith Richardson Foundation. Kent Smetters will present the case for market valuation, while Paul Angelo will explain how current pension valuation practices are useful to policymakers. Amy Monahan will discuss the legal restrictions surrounding pension reform.

If you are unable to attend, we welcome you to watch the event live on this page. Full video will be posted within 24 hours. 


11:45 AM
Lunch and Registration

12:00 PM
Paul Angelo, The Segal Company
Amy Monahan, University of Minnesota Law School
Kent Smetters, Wharton School of the University of Pennsylvania

Alan D. Viard, AEI

1:30 PM
Question-and-Answer Session

2:15 PM

Event Contact Information

For more information, please contact Veronika Polakova at [email protected], 202.862.4880.

Media Contact Information

For media inquiries, please contact [email protected], 202.862.5829.

Speaker Biographies

Paul Angelo is a senior vice president and actuary with the San Francisco office of The Segal Company. Angelo has over 30 years of actuarial consulting experience, and currently serves as valuation actuary for 16 major county and city retirement systems in California, as well as for University of California Retirement Systems. In 2007, Angelo served as a staff consulting actuary to the California Public Employee Post-Employment Benefits Commission. Angelo recently completed service as a member of the Governmental Accounting Standards Board Postemployment Benefits Accounting and Financial Reporting Task Force and currently serves as a member of the California Actuarial Advisory Panel. In addition to his consulting activities, Angelo is active in national organizations of pension actuaries.  He is a member of the American Academy of Actuaries Pension Committee, and is a member and past chair of its Public Plans Subcommittee.  He is the past chair of the Pension Section Council of the Society of Actuaries and currently serves as founding chair of the Public Plans Committee of the Conference of Consulting Actuaries. Angelo is a fellow of the Society of Actuaries and of the Conference of Consulting Actuaries, as well as an Employee Retirement Income Security Act-enrolled actuary and a member of the American Academy of Actuaries.

Amy Monahan is a professor of law and the Solly Robbins Distinguished Research Fellow at the University of Minnesota. She teaches and writes in the areas of federal taxation and employee benefits law. Her current research interests include employer-provided health care, health insurance regulation, and public and private retirement plans. Following law school, Monahan practiced with Sidley Austin LLP in Chicago. She previously taught at Notre Dame Law School and the University of Missouri School of Law. In 2013, she was awarded the American Law Institute’s Young Scholars Medal.

Kent Smetters is the Boettner Chair Professor at the Wharton School of the University of Pennsylvania and a faculty research fellow at the National Bureau of Economic Research. His recent research has focused on incomplete markets, investment risk management in the presence of fat tails, and the interaction of risk management and public policy. He held policy positions at the Congressional Budget Office (1995–98), was an economics policy coordinator (deputy assistant secretary) for the US Department of the Treasury (2001–02), and was the Kaiser Visiting Professor of Economics in Stanford University’s economics department (2001–02). He has published academic articles in leading journals, including the American Economic Review, the Journal of Political Economy, and the Quarterly Journal of Economics. He is often cited in major media outlets.

Alan D. Viard is a resident scholar at AEI, where he studies federal tax and budget policy. Before joining AEI, Viard was a senior economist at the Federal Reserve Bank of Dallas and an assistant professor of economics at Ohio State University. He has also been a visiting scholar at the US Department of the Treasury’s Office of Tax Analysis, a senior economist on the White House’s Council of Economic Advisers, and a staff economist at the Joint Committee on Taxation of the US Congress. While at AEI, Viard has also taught public finance at Georgetown University’s Public Policy Institute. Earlier in his career, Viard spent time in Japan as a visiting scholar at Osaka University’s Institute of Social and Economic Research. A prolific writer, Viard is a frequent contributor to AEI’s “On the Margin” column in Tax Notes and was nominated for Tax Notes’ 2009 Tax Person of the Year. He has also testified before Congress, and his work has been featured in a wide range of publications, including Room for Debate in The New York Times,, Bloomberg, NPR’s Planet Money, and The Hill. Viard is the coauthor of “Progressive Consumption Taxation: The X Tax Revisited” (AEI Press, 2012) and “The Real Tax Burden: Beyond Dollars and Cents” (AEI Press, 2011). He is also the editor of “Tax Policy Lessons from the 2000s” (AEI Press, 2009).


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