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What is included in the ARC? <br />• Normal cost <br />— Cost related to the current period <br />—Amortization of past unfunded actuarial <br />liability <br />• Thus, if an employer contributes the full <br />amount of ARC each year, then resources <br />accumulated should be sufficient for the <br />provision of benefits. <br />What are the options? <br />• Remain on a "pay-as-you-go" approach <br />— An accounting liability will occur at the <br />government-wide level <br />• Fund a portion of the ARC <br />—An accounting liability will still most likely <br />occur, but method demonstrates some sort of <br />plan <br />• Fund entire ARC <br />— No accounting liability <br />5 <br />