The brief’s key findings are:
- Despite the market rebound, most public pension plans ended FY 2020 with investment returns that fell short of actuarial expectations.
- Moreover, the March crash raised concerns about the liquidity needs of public plans, which already must sell assets to pay benefits.
- In particular, alternatives are harder to value and more illiquid, which make them a poor option for selling in a downturn.
- However, plans do maintain a cache of Treasuries that could be easily liquidated, so most plans are equipped to weather a sharp downturn.