Better Measurements: Risk Reporting for Public Pension Plans

A conference hosted by the Mossavar-Rahmani Center for Business & Government on September 21, 2018

View the Program

A previous conference hosted by M-RCBG  highlighted the difficulty of measuring risk at public pension plans in a way understandable to multiple audiences, and also the difficulty in comparing various plans when each uses a different yardstick. This 2018 conference, Better Measurements: Risk Reporting for Public Pension Plans, was designed to further address these issues. In particular: What are the objectives of measurement? What is the current state of play? Could we agree on a uniform set of best practices?

At the Better Measurements conference, a framework was presented by The Pew Charitable Trusts, as a strawman proposal and then subsequently distributed for comment. This framework, entitled the Foundation for Pension Risk Reporting, was published in November 2018 and updated in 2020.1

This framework document focuses on the measurement and assessment of investment and contribution risks for public pension plans – areas where there appears to be a strong measure of consensus regarding priorities – to inform planning and decision making.   Recognizing that not everyone will agree on every detail, the 2018 version reflects changes in response to most of the substantive suggestions that were received from conference participants.  The conference organizers2 believe that it represented a robust and reasonable starting point for pension risk reporting. The 2020 version reflects further work and refinement by The Pew Charitable Trusts.

1 See additional supporting documents from the pew charitable trusts: Stress Testing of Public Pensions Can Help States Navigate the COVID-19 Economy and Pension Risk Reporting Guidance Updated to Account for Pandemic's Impacts
2 Conference Organizers
Roger B. Porter | Co-Chair, Better Measurements Conference | IBM Professor of Business and Government, Harvard Kennedy School
Robert Stein | Organizer, Better Measurements Conference | Ernst & Young Partner (retired) and Chair of the SOA Blue Ribbon Panel on Public Pensions
Thomas J. Healey | Co-Chair, Better Measurements Conference | Senior Fellow, Mossavar-Rahmani Center for Business and Government, Harvard Kennedy School