Public Pension Fund Management

Intense media coverage of the public pension funding crisis continues to fuel heightened awareness in and debate over public pension benefits. With over $3 trillion in assets currently under management, the ramifications of poor oversight are severe. It is important that practitioners, researchers, and taxpayers be well-advised regarding any concer

The author surveys the empirical literature on the relationship between governance of public pension fund management and investment performance. He makes a preliminary attempt to identify good governance practices and distill governance guidelines aimed at reducing the political risk that is associated with central, public pension fund management. The author highlights the need for further work to support the development of a satisfactory set of governance guidelines.

And key messages -- Key principles of governance and investment management -- Governance of public pension assets -- Governance structures and accountabilities -- Qualification, selection, and operation of governing bodies -- Operational policies and procedures -- Managing fiscal pressures in defined-benefit schemes -- Policy responses to turbulent financial markets -- Investment of public pension assets -- Defining the investment policy framework for public pension funds -- Managing risk for different cohorts in defined-contribution schemes -- An asset-liability approach to strategic asset allocation for pension funds -- In-house investment versus outsourcing to external investment managers -- International investments and managing the resulting currency risk -- Alternative asset classes and new investment themes.

The first comprehensive guide to mastering the roles and responsibilities of a public pension fiduciary in the U.S. In an ever-changing financial and political landscape, your job as a public pension fiduciary continues to get more difficult. Now, you have the help you need. U.S. Public Pension Handbook is the only one-stop resource that covers the various areas of public pension governance, investment management, infrastructure, accounting, and law. This comprehensive guide presents critical data, information, and insights in topic-specific, easy-to-understand ways—providing the knowledge you need to elevate your expertise and overall contribution to your pension plan or system. U.S. Public Pension Handbook covers: •Today’s domestic and global public pension marketplace•The ins and outs of the defined benefit model, the defined contribution, and hybrid pension designs•Financial concepts central to the actuarial valuation of pension benefits•Public pension investment policies and philosophies•Asset allocations and how they have changed over time•State and local government pension contribution policies•The impact of governance structure and board composition on organizational results•Fiduciary responsibility and the general legal/regulatory framework governing trustees•How changes in trust law may affect public pension trustee fiduciary responsibility and liability•Best practices in pension governance and organizational design Public pension trustees are the unsung heroes of the world of finance, collectively managing over $6 trillion in retirement assets in this country alone. U.S. Public Pension Handbook provides the grounding you need to make sure you perform your all-important with the utmost expertise and professionalism.

"Proceedings of the second Public Pension Fund Management Conference, May 2003."--T.p.

Abstract: Public pension funds have the potential to benefit from low operating costs because they enjoy economies of scale and avoid large marketing costs. But this important advantage has in most countries been dissipated by poor investment performance. The latter has been attributed to a weak governance structure, lack of independence from government interference, and a low level of transparency and public accountability. Recent years have witnessed the creation of new public pension funds in several countries, and the modernization of existing ones in others, with special emphasis placed on upgrading their investment policy framework and strengthening their governance structure. This paper focuses on the experience of four new public pension funds that have been created in Norway, Canada, Ireland and New Zealand. The paper discusses the safeguards that have been introduced to ensure their independence and their insulation from political pressures. It also reviews their performance and their evolving investment strategies. All four funds started with the romantic idea of operating as 'managers of managers' and focusing on external passive management but their strategies have progressively evolved to embrace internal active management and significant investments in alternative asset classes. The paper draws lessons for other countries that wish to modernize their public pension funds.

As pension fund systems decrease and dependency ratios increase, risk management is becoming more complex in public and private pension plans. Pension Fund Risk Management: Financial and Actuarial Modeling sheds new light on the current state of pension fund risk management and provides new technical tools for addressing pension risk from an integr

Pension funds are big business. They are important to employers, employees, governments, and society at large. With the increasing concern over dwindling retirement pension fund crises, managing pension plans has never been more critical--and the pressure on those who are responsible for them has only intensified. Destined to become the classic resource on pension plan management, Managing Pension Plans explains everything you need to know for successful management of any pension plan--from how pension plans help sponsors manage their workforces to the latest in investment and risk management. With concise and practical Managing Pensions Plans is an indispensable resource for pension fund trustees, boards of directors, managers, and administrators of both public and private pension plans as well as for the money management firms, consultants, actuaries, and accountants who serve the pension fund industry. Logue and Rader, two of the world's leading experts on the subject, explain all the financial, legal, economic, accounting, and managerial issues that those who make pension fund decisions must juggle--in language that non-financial managers can understand, yet with sufficient depth to be useful to financial managers as well. The authors synthesize the latest in capital market and financial economics research to help those involved in pension management improve their decision-making in all the critical areas. In addition, the book describes in detail the responsibilities of fiduciaries, revealing how to be both a prudent fiduciary and a capable decision maker. Managing Pension Plans offers candid advice on how pension managers can improve fund performance by being more effective shareholders. As pension fund management and performance increasingly affect the success of organizations as a whole, this book will be indispensable to anyone--from fund analysts to board members-who influences pension fund decisions.

From the Wharton School, offering a comprehensive assessment of the political and financial dimensions of public-sector pensions from the colonial period until the emergence of modern retirement plans in the twentieth century.

An understanding of corporate governance theory can promote the adoption of appropriate governance tools to limit agency problems in public pension fund management. The absence of a market for corporate control hinders the translation of lessons from the private sector corporate world to public pension governance. The establishment of a fit, and proper governing body for public pension funds, thus may be even more important than the maintenance of a comparable body for private sector corporations. In particular, behavioral controls should be carefully designed.