The Most Important Trends and Developments in Pension Funding

_{Pension critics and allies alike will often reduce a fund's performance down to a single metric. However, funding ratios often don't tell the whole story of a pension's health.}

By: Hank Kim, Executive Director and Counsel, NCPERS

Pension critics and allies alike will often reduce a fund's performance down to a single metric. However, funding ratios often don't tell the whole story of a pension's health. As noted in NCPERS' 2023 research paper, outdated metrics such as funding ratios often fail to account for a pension's long-term financial needs, leading to flawed analysis and recommendations.

We believe that it's crucial to engage in thoughtful, data-driven discussions around pension funding solutions to find effective strategies as we work to preserve and enhance public pension plans across the country. NCPERS Public Pension Funding Forum serves as the venue for these discussions.

The 2024 Public Pension Funding Forum will be held August 18-20 in Boston, Massachusetts. This annual event brings together trustees, pension administrators and staff, governmental officials, and other members of the public pension and investment community to network and learn about the most important trends and developments in pension funding.

Attendees will gain a deeper understanding of the fiscal challenges facing public pension plans and learn about cutting-edge solutions that can help ensure their long-term sustainability. This year's program puts a special emphasis on funding strategies for mature plans with negative cash flow.

Session highlights include a case study exploring how Connecticut's mature state employees' retirement system became a success story, not only improving its funding levels but also its net amortization position. Attendees will also hear about funding strategy best practices for mature plans from both the investment and actuarial perspective.

A topic of interest for many pension funds has been understanding how to best utilize artificial intelligence to drive efficiencies, increase returns, and mitigate risk. We'll explore these topics during the Forum as well. Demographic challenges facing the U.S. combined with emergence of AI are likely to make an increasing number of pension plans mature. Pia Malaney of the Institute for New Economic Thinking will provide a high-level overview of artificial intelligence and its potential use cases, then Frank Williams of the Teacher Retirement System of Texas will share insights about AI and the future of public pensions.

Registration for the Public Pension Funding Forum will open in May, so be sure to save the date (August 18-20 in Boston) and sign up here for event updates. We hope you'll take advantage of this unique opportunity to be part of the community that is driving innovation and change in the field of pension funding.