4 Ways Pension Boards Increase Pension Crises + 3 Solutions

• innate structural disincetive to consider long term pension viability
  • “Political appointees are responsive to constituencies”
  • Elected board members are “tempted to trade pension savings tomorrow for higher salaries today”
• “more worker representation on boards and stronger public unions led to more fiscally irresponsible decisions”
• “Political appointees also tend to favor investing in local industries — whether or not they are actually profitable”
• These incentives “don’t protect employees and taxpayers from major financial risks”

The proposed solutions for Pension Boards:

• require greater financial expertise
• more clearly define fiduciary duties
• “defined-benefit plans a thing of the past would wisely eliminate the need for pension fund boards altogether”

Governing | A senior fellow at the Manhattan Institute and associate professor at the City College of New York-CUNY| How Public Pension Boards Are Making a Crisis Worse