Public Pension Governance, Funding, and Performance: A Longitudinal Appraisal

Abstract

Pension plans covering US public sector employees now face the twin challenges of poor asset returns and rapid increases in liabilities, producing the worst pension funding outcomes in decades. This paper explores how public pension plan investment performance and funding is related to several structural and pension design features. Using a new longitudinal dataset on state and local public pension plans, we evaluate how investment performance is tied to stock funding ratios and how stock funding ratio in turn affects flow funding efforts. We find that particular governance structures can enhance public pension plan investment performance and funding status, and we suggest ways in which public plan design might be improved.

Political Representation and Governance: Evidence from the Investment Decisions of Public Pension Funds

“…Second, our paper contributes to the literature on public pension underfunding and investment incentives under current accounting and regulatory regimes (Novy‐Marx and Rauh (), Andonov, Bauer, and Cremers ()), and on the relation between characteristics of pension fund boards and overall fund performance and asset allocations (Mitchell and Hsin (), Useem and Mitchell (), Coronado, Engen, and Knight (), Mitchell and Yang (), Bradley, Pantzalis, and Yuan ()). Public pension funds are important to both sponsoring governments and their employees, as large amounts of taxpayer and public employee money are at stake .…”

The actuarial sources of the rise in unfunded liabilities in America's defined benefit plans in the 21st century

“…The same inconsistent findings are present for political party control of state governments and collective bargaining (Coggburn and Kearney, 2010;Thom, 2013;Thom and Randazzo, 2015). Pension board composition also has mixed effects on UAL accrual (Yang and Mitchell, 2005;Bradley et al, 2016;Smith and Dove, 2016). However, institutional and political explanations may only describe what enabled UALs to rise.…”

Governance of Italian Pension Funds: Problems and Solutions

“…Coleman e altri (2006) per i FP australiani, Ammann e Zing (2008) per quelli svizzeri; per i FP americani cfr. Mitchell e Yang (2008); Mitchell e Useem (2000); Hsin e Mitchell (1997). Per alcune ulteriori valutazioni analitiche cfr.…”

“…Alcuni autori mostrano che la performance dei FP pubblici americani è inferiore per quei fondi che hanno una più elevata percentuale di membri del CdA costituita da lavoratori pensionati, che notoriamente mancano delle conoscenze professionali necessarie per un'efficiente gestione del fondo: cfr. Mitchell e Yang (2008); Hsin e Mitchell (1997). Ambachtsheer e altri (2006) trovano una relazione positiva tra un indicatore sintetico della governance dei FP di più paesi (in cui risaltano le capacità degli amministratori) e il valore attualizzato netto delle attività dei fondi medesimi.…”