Chapter

How Have Public Sector Pensions Responded to the Financial Crisis?

Andrew G. Biggs

in Reshaping Retirement Security

Published in print September 2012 | ISBN: 9780199660698
Published online January 2013 | e-ISBN: 9780191745058 | DOI: http://dx.doi.org/10.1093/acprof:oso/9780199660698.003.0013

Series: Pensions Research Council

How Have Public Sector Pensions Responded to the Financial Crisis?

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State and local government pension funds lost nearly $1 trillion in net assets in 2007–8 and pension funding levels fell. The chapter analyzes these patterns by looking at target asset allocations for twenty-nine large public sector plans covering over half of all public pension assets. On average, the standard deviation of target portfolio returns increased slightly and many plans surveyed increased risk by more than 0.3 percentage points and eight increased risk by more than 1 percentage point. Few plans retreated from risk taking, while a small number embraced more risk than before.

Keywords: public sector pensions; investment practices; defined benefit plan; risk; crisis; assets; portfolios

Chapter.  3396 words.  Illustrated.

Subjects: Pensions

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