Public Pensions Investments and Governance

How systems invest is critical to meeting pension obligations over long term

The Pew Charitable Trusts' public sector retirement systems project performs 50-state and major city research on all aspects of public pension systems, including fiscal health, investment practices, benefits design, and governance. State- and locally run retirement systems currently manage trillions of dollars in public pension fund investments.

There is no one-size-fits-all approach to investments, but allocation of assets and bottom-line performance ultimately determine plans' fiscal health and the ability to pay for promised retirement benefits. In fact, experts estimate that investment returns account for 60 percent of pension benefits.

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State Public Pension Funds Increase Use of Complex Investments

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State and locally run retirement systems currently manage over $3.6 trillion in public pension fund investments, most of which are held by states. Broadly, half of these assets are invested in stocks; a quarter in bonds and cash; and another quarter in what are known as alternative investments, such as private equity, hedge funds, real estate, and commodities.

Additional Resources

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June 27, 2024

A More Measured Approach as States Navigate 'Environmental, Social, and Governance' Mandates

State policymakers across the political spectrum have increasingly created rules and mandates targeting environmental, social, and governance (ESG) investment strategies in recent years. In 2024 alone...

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March 25, 2024

How to Ensure Transparency in Public Employee Pension Fund Governance

For the trustees of state and local public pension funds, who invest and manage more than $5 trillion in assets nationwide, transparent investment reporting serves as the cornerstone for making informed...

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January 24, 2024

How Emerging Financial Risks Could Affect Public Pension Fund Assets

The debate over whether state public pension administrators should consider the financial implications of environmental, social, and governance (ESG) factors in their investment decisions has been...