U.S. Public Pension Handbook by Von M. Hughes -- Read -- Imperial Library of Trantor

Index

Cover Title Page Copyright Page Dedication Table of Contents Foreword Introduction PART I Introduction and Current Marketplace

1 History of Public Pensions

Introduction Early Pension Development Public Pension Development

Early Twentieth-Century Development Late Twentieth-Century Development

Chapter Notes

2 Public Pension Marketplace

Introduction Global Retirement Market Global Pension Trends

Population Aging Global Regulatory Environment

U.S. Retirement Market U.S. Public Pension Market

Members and Beneficiaries Pension Coverage and Type Public Pension Revenue Public Pension Expenditures

U.S. Public Pension Trends

Public Pension Funding Addressing the Funding Gap Design Shift

Chapter Notes

PART II Pension Plan Design

3 Defined Benefit Model

Introduction Public Pension Designs Defined Benefit Plan Design

Regular Service-Related Benefits

Normal Service Benefit Early Retirement Benefits Postemployment Benefit Adjustments Service Credits

Ancillary Pension Benefits

Healthcare Benefits Disability and Death Benefits Deferred Retirement Option Plan

Pension Benefit Adequacy

Replacement Ratio

Social Security Coverage

State Tax Liability

Chapter Notes

4 Actuarial Valuation Concepts

Introduction Actuarial Valuation

Demographic Assumptions Economic Assumptions

Actuarial Cost Methods

Cost Method Classifications Actuarial Cost Methods Impact of GASB Changes

Chapter Notes

5 Beyond Defined Benefit

Introduction Defined Contribution Plans

DC Plan Types

DC Plan Services DC Investment Options and Services

Comparison of DB and DC Plans

Persistence of the DB Design Disadvantages of Defined Benefit Advantages of Defined Contribution Disadvantages of Defined Contribution Pension Design Risk: DB vs. DC

Hybrid Plan Designs

Side-by-Side (or DB+DC) Cash Balance Plan Alternative Hybrid Designs

Chapter Notes

PART III Investment Policy and Implementation

6 Investment Policy

Introduction Investment Policy Statement

Statement of Goal, Purpose, or Mission Identification of Decision-Maker(s) Statement on Managing Risk of Overall Portfolio Performance Measurement and Evaluation Legal Standards

Chapter Notes

7 Asset Allocation Policy

Introduction Why Asset Allocation Policy Matters How Asset Allocation Policy Is Set

Peer Comparison Mean Variance Optimization (MVO)

Determining Eligible Asset Classes Establishing Capital Market Assumptions Finding an Efficient Frontier Choosing an Optimal Asset Allocation

Asset Liability Management (ALM)

Chapter Notes

8 Public Pension Portfolio

Introduction Asset Allocation Data Asset Allocation Trends

Equities Fixed Income Alternative Assets

Private Equity Hedge Funds Real Estate and Infrastructure

Environmental, Social, and Governance Increasing Overall Portfolio Risk

Chapter Notes

9 Public Pension Performance

Introduction Public Pension Performance

Performance Attribution Performance Variation Asset Class Performance Characteristics Performance Benchmarks Performance vs. Benchmark

Chapter Notes

10 Public Pension Contributions

Introduction Contributions as Pension Revenue Contribution Funding Policy

Annual Required Contribution Managing Contribution Volatility Funding Policy Best Practices Employer Contribution Indices Employee Contributions DC Contributions

Chapter Notes

PART IV Plan Governance

11 Governance Structure

Introduction Legislative Oversight Common Governance Structures

Governing Fiduciaries: Trustees Board Composition

Core Competencies and Education Financial Expertise Diversity (Race and Gender)

Committee Structure

U.S. Sovereign Wealth Funds Chapter Notes

12 Why Governance Matters

Introduction Impact on Performance Impact on Asset Allocation Impact on Funding What Fiduciaries Think Chapter Notes Appendix: Sample “Best Practices”

NCPERS Best Practices GFOA Best Practices Clapman Report 2.0

13 Fiduciary Responsibility

Introduction ERISA Exemption and Relevance Duties of a Fiduciary

Duty of Prudence Duty of Loyalty Duty of Impartiality Duty with Respect to Delegation Duty with Respect to Co-Trustees Duty to Furnish Information to Beneficiaries Duty to Segregate and Identify Trust Property

Trustee Liability Chapter Notes

14 Public Pension Staff

Introduction Pension Staff Overview Pension Staff Studies

Passive vs. Active Management Internal vs. External Management Compensation

Pension Consultants External Managers

Investment Policy Manager Selection Criteria Research on Manager Selection

Chapter Notes

15 Delegation and Pension Evolution

Introduction Prudent Investor Rule Delegation Redefined Five Parameters of Prudent Delegation Public Pension Evolution Chapter Notes

16 Federal Pension System

Introduction Federal Civilian Employees

Civil Service Retirement Disability Fund Eligibility Federal Retirement Benefits The Thrift Savings Plan

Military Personnel

Military Retirement Fund Eligibility Active Retiree Benefits Reservist Benefits Disability Retirement Ancillary Military Benefits

Chapter Notes

Endnotes Index About the Author

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