Public Pensions Investments and Governance

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

Investments and Governance

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.

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