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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What's New at NASRA: Updated Cost of Living Issue Brief

Cost-of-Living Adjustments (COLAs) play a significant role in public pensions. They help retirees keep up with rising prices, but they also add costs to pension plans. Policymakers and plan sponsors are tasked with balancing three things: benefits adequacy, plan sustainability, and affordability for members and plan sponsors.
The recent increase in inflation caused many policymakers and, in some cases pension trustees, to review how benefits are designed and paid for, including the way COLAs are granted and funded. NASRA’s recently updated issue brief on the lates trends in COLAs is available in the NASRA Research Center.