How Do Public Pension Plan Returns Compare to Simple Index Investing?

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The brief’s key findings are:

  • Public pension plans are increasingly relying on alternative investments and active management.
  • But how does plan performance compare to a simple 60/40 index over various periods from 2000-2023?
  • Over the full period, plan returns are virtually identical to the simple index strategy, but plans have done much worse since the Global Financial Crisis.
  • If the current approach doesn’t yield higher long-term returns, a strong argument can be made for sticking with a simple, transparent strategy.

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