Defined-benefit public employee pensions are increasingly relying on investment returns, rather than employee and employer contributions, to pay for the guaranteed benefits to pensioners. This makes the selection of a plan’s investment strategy important. Nationally, public employee pension plans have shifted investments from low-risk, low-return strategies which rely on fixed-income investments to high-risk, high-return strategies which include more equities and alternative investments. This essay examines the Comprehensive Annual Financial Reports (CAFR) of Missouri’s public school teacher pension programs. Using information from each plan’s CAFR, we find that the plans have followed the national trend and have increasingly shifted away from fixedincome and cash investments.
Betting on the Big Returns: How Missouri Teacher Pension Plans have Shifted to Riskier Assets
Public Pensions
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About the Author
James V. Shuls
James V. Shuls is an associate professor of educational leadership and policy studies at the University of Missouri St. Louis. His work has been featured in numerous media outlets, including Phi Delta Kappan, Social Science Quarterly, Education Week, The Rural Educator, Educational Policy, the Arkansas Democrat-Gazette, and the St. Louis Post-Dispatch. He earned his Ph.D. in education policy from the University of Arkansas. He holds a bachelors degree from Missouri Southern State University and a masters degree from Missouri State University, both in elementary education. Prior to pursuing his doctorate, James taught first grade and fifth grade in southwest Missouri.
About the Author
Michael Rathbone
Michael Rathbone was a policy researcher at the Show-Me Institute. He is a native of Saint Louis and a 2008 graduate of Saint Louis University, where he earned a bachelor of science degree in biomedical engineering. In 2010, Michael obtained an M.B.A. from Washington University in St. Louis with concentrations in finance and health care management. At the Show-Me Institute, Michaels policy areas included the state budget, taxes, public pensions, and public subsidies. He also delivered lectures to area high school students about the Great Depression from an economic perspective. Michael lives in Fenton.
