Public Pension Governance: Effects of Reforms, Investment, and Governor's Power on Pension Plan Outcomes




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This dissertation continues existing scholarship by looking into how retirement system reforms, market changes and political institutions have shaped public retirement plan outcomes across the country over the past decade. After a brief introduction, this analysis begins in Chapter 2 by considering how pension benefit changes are reshaping human capital commitment. By analyzing both administrative and original survey data, this study finds that during times of pension reform and benefit cutback there is an increase of both actual turnover and the intent to leave the organization. The latter is especially true for individuals who do not believe that the pension changes were fair to all members and those with middle-income household earnings. Chapter 3 investigates how public pension managers adjust equity allocations over time. By applying a life-cycle framework of investing, this study finds that pension systems with higher ratios of actives to retirees are more likely to invest in riskier equities. However, after the onset of the market contraction in 2008, the total share of equity investments fell as plans assumed less risky portfolios. Chapter 4 investigates how gubernatorial power differences influence state government pension contributions. By using a formal gubernatorial power index, this study shows that states with greater governor budgetary power tend to make higher pension contributions. This is also the case with governors who have greater appointment power, veto power, and party control. Taken together, the three essays of this dissertation contribute to a better understanding of the effects that the turbulent times surrounding the Great Recession had on public retirement plans. The findings of these studies are important in light of the need to design and sustain fiscally responsible pension plans while keeping promises to government employees and providing incentives for qualified candidates to enter the public workforce.



Finance, Public, Pension trusts, Investments


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