By investing in private equity and credit, we expect to be able to achieve 7% returns

Market turmoil has thrown a spotlight on the challenges that public pension funds face in delivering retirement security to public employees. The debate about how to meet obligations is important for policy makers, who worry that securing the benefits pensioners depend on will burden state and local governments—and future generations.

CalSTRS adopted a new global equity investment policy to include the use of an active risk budget.

The investment committee of the $252.4 billion California State Teachers' Retirement System, West Sacramento, adopted the active risk budget to allow staff to move equity investments between passive and active management. CalSTRS had $128.5 billion in global equities as of Dec. 31.

A large move into equity factor investing was key for largest US pension.

The California Public Employees’ Retirement System took a more than $50 billion bet with its $177 billion stock portfolio and won. The bet helped beat volatile equity markets in the 12-month state fiscal year that ended June 30, show interviews  and pension system investment committee documents.

The savings gap is a looming crisis, and states aren’t sure how to help.

Mike Maciag

For years, salon owner Luke Huffstutter, of Portland, Ore., wanted to offer his employees a way to save for retirement. Costs  were too steep for the small company, though, and few employees took the initiative to set up 401(k) plans on their own.