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Reporting and Disclosure by Public Pension Systems

Reporting and disclosure are functions all pension systems must perform, and public systems are no exception. So how are they doing? A recent study takes a look.

Pension Reporting and Disclosure: The Current State of Practice and Examples of What Works Welltakes a look at how major pension systems communicate financial, benefit and governance information to their members and other interested parties, as well as which systems provide useful illustrations and lessons. The study was conducted by the Center for State and Local Government Excellence’s Joshua Franzel, Ph.D. and Elizabeth Kellar, as well as Paula Sanford, Ph.D. of the University of Georgia; the National Association of State Retirement Administrators’ Keith Brainard and Alex Brown, provided input and assistance.

The researchers looked at data concerning the public reporting practices of 83 of the largest statewide pension plans in every state and the District of Columbia. Those 83 systems, which administer pension and other benefits for active and retired employees of state and local government, including cities, counties, school districts, and others, as of fiscal year 2015 held approximately $3.2 trillion dollars in assets and had around 12 million active members and 8.3 million annuitants.

They also looked at the pension reporting and communication efforts of five pension systems they considered geographically and structurally diverse: California State Teachers' Retirement System, Public Employee Retirement System of Idaho, Maine Public Employees Retirement System, South Carolina Public Employee Benefit Authority, and Texas Municipal Retirement System.

Key Findings


The researchers found certain themes common to systems that have developed what they called “robust communication and financial reporting initiatives”:

  • the importance of active, two-way communication between the system and all stakeholders;

  • system leadership setting identification of communication and reporting as a priority;

  • engagement of all stakeholders — even critics — before, during and after implementation of policy, benefit and programmatic changes; and

  • openness to using social media technologies and/or establishing formal structures in order to gather detailed feedback from a range of stakeholders.

A strong majority — 87% — of the systems in the sample follow the Government Finance Officers Association (GFOA) reporting standards in producing their comprehensive annual financial reports (CAFR), and nearly half have developed a plain language or popular annual financial report.

Most systems communicate investment risk through an investment policy statement that outlines the level of risk the system is willing to absorb and provides information on target allocations of fund assets to different asset classes that align to desired risk levels.

All the systems are required to develop an actuarial valuation and also conduct periodic experience studies “to formally measure how closely their plans’ actuarial assumptions match their actual experience, over several years.” And almost all the systems have:

  • a funding policy they produced or that state law established;

  • sample investment fee disclosures; and

  • information available on benchmark comparisons online, in the CAFR, or both.