ABSTRACT
While the discussion of pension plan management up to this point is limited only to the pension plan, in the real world of public finance, a public pension plan does not exist by itself. The funding of public pension benefits is an integral part of financial resource allocation in the public sector. In order to get a more thorough understanding of the management of public pension plans, the discussion needs to be broadened to include the larger world of public budgeting. Public budgeting is a political process that determines what public services should be funded, how much funding should be given to each public service, and the amount of taxes that is needed to fund all these public services. It is by far the most important component of government financial management.
