Skip to content
Politicians have discovered the perils of making changes to financially troubled pension plans. Kentucky teachers protested against a 2018 reform bill.

Politicians have discovered the perils of making changes to financially troubled pension plans. Kentucky teachers protested against a 2018 reform bill.

Photographer: Bill Pugliano/Getty Images
Markets
The Big Take

Investing Novices Are Calling the Shots for $4 Trillion at US Pensions

Public-employee plans are underfunded, chasing higher returns and underperforming international peers overseen by professionals

By

Canada selects directors to oversee its public pension funds for their financial expertise and pays some six-figure salaries. In the Netherlands, board members must obtain approval from the central bank.

In the US, a lineup of unpaid union-backed reps, retirees and political appointees are the vanguards of a $4 trillion slice of the economy that looks after the nation’s retired public servants. They’re proving to be no match for a system that’s exploded in size and complexity.

Share