Public Pensions and Retirement Security in the U.S.

U.S. public pensions are some of the largest institutional investors in the world, both affecting financial markets and influencing the global asset management industry as a whole. Public pensions are also an important leg of the three-legged stool of retirement security in this country Social Security, pension (public and private), and personal savings. This course is designed to introduce students to the public pension system in our country. The course will review public pension history, the current marketplace, and the role public pensions play in the overall retirement security in the U.S. The course will address the current challenges that public pensions face, specifically the well-publicized funding crisis. Public pension design (defined benefit, defined contribution, hybrid), and the actuarial concepts on which it is based, will be discussed and evaluated as both the cause of and potential solution to the pension crisis. The class will discuss public pension governance structures and the emerging body of governance research, touching upon investment infrastructure and expanding models of delegated authority. In addition, the course will focus on public pension investment policy and investment portfolios including the move into alternatives, private markets, and ESG investments as pension look for more investment return. Students pursuing careers in asset management (portfolio management, client service, or business development) or investment consulting should be interested in this course to better understanding how the largest clients in these sectors are managed and operated. Students interested in the role public pensions play in retirement security in this country today, and how these organizations will evolve to address the challenges they face, should be interested in this course. Finally, students interested in the growing influence of public pensions and their part in “institutionalizing” newer investment strategies (activism, alternatives, private markets, and ESG) would benefit from this course as well.