- Assumed Rate of Return
- Myth: The Assumed Rate of Return Determines the Value of Your Benefits
- Quick Recap: Normal Cost
- Unfunded Liabilities
- Amortization Payments
- Funded Ratios
- Myth: It Is Okay For a Pension Plan to Target Less than 100% Funding
- Actuarially Determined Contribution (ADC)
- Myth: More Teachers are Needed to Ensure Pension Debt Gets Paid Off
- Myth: Pension Funds Don't Need to Contribute the Full ADC
- Quick Recap: Unfunded Liabilities
- Governance: Who is in Charge of Pension Funds?
- States Running Healthy Teacher Pensions
Governance: Who is in Charge of Pension Funds?
Managing guaranteed income plans is complex. In most states, a board of trustees that represents different stakeholders in the pension plan manages the system. Such stakeholders typically include teachers, retirees, the legislature, the treasurer’s office, and the governor. Some states also have independent members that represent the financial community or taxpayers, while others have an auditor, comptroller, or other oversight official on the pension board.
Ultimately, pension systems vary a great deal in the number of trustees, the stakeholders they represent, how they are selected, and minimum qualifications. Well-constructed boards should give all stakeholders a voice in decision making; the exact balance will depend on preferences in a given place.
The pension board holds a fiduciary responsibility for administration of benefits and investment of assets, meaning they are bound to make decisions in the best interest of teachers, like you. Given the complexity of pension board responsibilities, governments should ensure minimum, adequate qualification standards to serve on the board. Retirement systems should also provide appropriate training for any board members who need it.