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.
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