Which of the following is true about public sector pensions?

Question

Quizplus · Accepted Answer

The financial crisis and recession that started in 2008 reduced the market value of assets set aside to pay public sector pensions, causing significant underfunding issues for many state and local governments.

Answer: D
 Public sector retirement benefits typically have more generous retirement ages than those in the private sector. Public employees often are entitled to full retirement benefits after completing 25-30 years of service, while most private sector employees must wait until age 62 or later.

Option A is incorrect because accrued pension liabilities must be paid, even in the event of bankruptcy. Option B is incorrect because pension obligations are considered binding legal contracts, and many state constitutions have clauses that protect public sector pensions.

Which of the Following Is True About Public Sector Pensions