Open Access. Powered by Scholars. Published by Universities.®
Social and Behavioral Sciences Commons™
Open Access. Powered by Scholars. Published by Universities.®
- Publication Type
Articles 1 - 2 of 2
Full-Text Articles in Social and Behavioral Sciences
What Determines Public Pension Investment Risk-Taking Policy?, Nancy Mohan, Ting Zhang
What Determines Public Pension Investment Risk-Taking Policy?, Nancy Mohan, Ting Zhang
Employment Research Newsletter
No abstract provided.
Public Pension Crisis And Investment Risk Taking: Underfunding, Fiscal Constraints, Public Accounting, And Policy Implications, Nancy Mohan, Ting Zhang
Public Pension Crisis And Investment Risk Taking: Underfunding, Fiscal Constraints, Public Accounting, And Policy Implications, Nancy Mohan, Ting Zhang
Upjohn Institute Policy Papers
Public pension funds that cover retirement benefits for almost 20 million active or retired employees have been significantly underfunded. An important, though largely overlooked, issue related to pension underfunding is the excessive investment risk levels assumed by public plans. Our analysis suggests government accounting standards strongly affect public fund investment risk, as higher return assumptions (used to discount pension liabilities) are associated with higher investment risk. Public funds undertake more risk if they are underfunded and have lower investment returns in previous years, consistent with the risk transfer hypothesis. Furthermore, pension funds in states facing fiscal constraints allocate more assets …