Recent controversies around the investing of pension assets in both the public and private sectors highlight the extent to which fundamental fiduciary principles have been forgotten or lost. It is critically important that those principles be reaffirmed and strengthened so the large sums that accumulate in pension plans are used for their intended purpose on behalf of the principals for whom the money is set aside, and not used as a slush fund to advance goals unrelated to the providing of pension benefits.
When it comes to public pension investment management, policymakers and fiduciaries who sincerely want to serve their constituents and fulfill their responsibilities would do well if, through all the noise, they test all decisions against the fundamental duty of loyalty that requires investing solely in plan members’ and taxpayers’ best interests for the exclusive purpose of providing pension benefits and defraying reasonable expenses.
Full Policy Brief—
Other people’s money: Can investing public employee pension assets to further nonfinancial goals ever be consistent with fiduciary principles?
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