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UNIVERSITY GRADUATE SCHOOL BULLETIN ANNOUNCEMENT Florida International University University Graduate School Doctoral Dissertation Defense Abstract Sustainable Public Pension System for Florida Local Governments: Financial Solvency, Paradigm Switch and Interperiod Equity by Yongqing Cong The issue of increasing unfunded pension liabilities of state and local governments has drawn increasing attentions since the 2008 economic downturn. Many public agencies have conducted reforms to ensure the sustainability of public pension systems. Previous research and practices provide two reform strategies: Incremental changes to amend the existing defined benefit (DB) plans, and the pension model switch from the DB model to defined contribution (DC) plans. This study first examines the effectiveness of the incremental reform strategies by identifying the determinants of the financial solvency of the DB model, utilizing the existing data of 151 Florida local DB plans. Second, it gathers the primary data through surveys and interviews with the finance and human resources directors in Florida local governments to analyze their perceptions of public pension reform and reveal their readiness to conduct the public pension paradigm switch. It also examines the critical interperiod equity issue and the impacts of the two-tier benefit structure during the recent pension reform. The results suggest that incremental reform strategies that reduce benefits or increase contributions are not effective in improving the financial solvency of public DB plans. The alternative approach—the DB-to-DC transition—is attractive to local governments because it will relieve the pension costs burden and transfer the investment risk from employers to employees. The transition is also politically palatable because the taxpayer sentiment is not supportive of perceived generous retirement benefits of public employees. Meanwhile, local governments are hesitant to implement the paradigm switch due to prohibitive transition costs, political pressure, and the potential negative impacts to public recruitment and retention. Local officials do not perceive a reduction of morale with the two-tier benefit structure at the present time; they believe this issue will solve itself along the retirement of senior employees. Date: May 12, 2014 Time: 10:00 a.m. Place: University Park, PCA 254 Department: Public Administration Major Professor: Dr. Howard A. Frank