Date of Award


Degree Type

Doctoral Dissertation

Degree Name

Doctor of Business Administration (DBA)


Jack Welch College of Business


In partial fulfillment of the requirements for the degree of Doctor of Business Administration in Finance Sacred Heart University, Jack Welch College of Business and Technology, Fairfield, Connecticut.

Dissertation Supervisor

Dr. Lucjan T. Orlowski

Committee Member

Dr. Lawrence Hatheway

Committee Member

Dr. Khawaja Mamun


The main purpose of this study is to identify the key determinants of the unfunded liability (UL) for state and local public Defined Benefit (DB) pension plans. The UL is a measure of pension debt in plans across the U.S. This debt continues to rise while pension obligations to current and future retirees must also be satisfied. The UL is derived by subtracting the market value of plan assets from its accrued liabilities. If assets are less than liabilities, it signals a lack of funds set aside to cover all pension benefits and generates what is known as an unfunded liability on the financial books of many states across the country. If assets exceed liabilities, a plan is considered fully funded. The pension and employee benefits committee noted that full funding does not usually imply that the pension plan has sufficient assets to cover its solvency liabilities (unless the funding objective is to achieve a solvency level of funding.)1 Throughout my manuscript, I will refer to the unfunded liability (UL) as the actual accrued liability and refer to the unfunded liability gap (ULG) as an expression of the financial factors that could help to reduce the liability. The contributing factors to receive a DB pension benefit, involves a combination of both the plan design and fiscal health of pension plans. Plan design can range from elements of retirement requirements such as age, years of service, average salary, service credits, mandatory employee contributions, while fiscal health includes parameters that measure the financial impact of the pension liability. Examples include and not limited to, employers’ contributions, tax revenue per capita, Gross Domestic Product (Real GDP) per capita, budget surplus, discount rates and other investment measures.

JEL Classification

H55; H75; H72; H55; G11

Creative Commons License

Creative Commons Attribution-Noncommercial-No Derivative Works 4.0 License
This work is licensed under a Creative Commons Attribution-Noncommercial-No Derivative Works 4.0 License.



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