Overview of Public Pension Plan Governance

Introduction

Although often overlooked or misunderstood, governance–defined as the systems and processes that comprise the oversight and control of an organization–plays an important role in the performance of a state or local government retirement system. Public retirement systems are established under state statutes, local ordinances, or both, and subject to fiduciary, investment, and administrative laws, which both grant authority to, and place restrictions on, entities responsible for one or more key areas of plan governance. This overview is intended to summarize the laws and rules that govern public plans, and the range of entities typically responsible for them. Common law trust laws, as well as the prudence and fiduciary standards required by them, also govern public pensions. Because every public retirement system and pension plan, including its governance structure, is unique, the description provided in this introduction is intended to illustrate typical arrangements and will not apply to every state, system, and plan. Subsequent publications will address some of these unique or atypical governance arrangements.

Date published

November 2019

Contact

Keith Brainard, Research Director
Alex Brown, Research Manager

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Becoming a member of NASRA offers a unique opportunity to join a community committed to the sound, efficient, and innovative stewardship of public retirement systems. Membership connects you with a network of professionals and experts, providing valuable insights into managing public retirement systems with a focus on sustainability and risk-averse strategies.

By joining NASRA, you gain the tools and resources to enhance the management of public retirement systems, ensuring their long-term success and reliability for generations to come.

What’s New at NASRA: Employee Contributions to Public Pension Plans

Employee contributions remain a central part of public pension financing, and the way those contributions are structured is subject to change depending each states' governance rules. . NASRA’s 2026 updated brief finds median employee contribution rates of 6.2 percent of pay for employees who participate in Social Security and 9.0 percent for those who do not. For employees who do not participate in Social Security, the public pension often plays a broader role in retirement security, effectively providing two of the traditional three legs of the retirement stool rather than one.

Since 2009, 41 states increased employee contributions in at least one plan, while some states recently reduced rates for selected employees. Variable contributions are also becoming more common, with 26 plans in 17 states adjusting employee rates based on funding, plan costs, or other factors. The brief provides current trends and a state-by-state look at employee contribution requirements across public retirement systems.