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Market romano 1993 public pension fund activism

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Unformatted text preview: market failure.” market Romano (1993): Public Pension Fund Activism – Pressure for social investing is not a problem Pressure for private (corporate) pension funds. In defined benefit plans, employer bears risk of lower returns. lower » Page 811. “ Public pension funds are backed by a Page state’s taxing power… The cost of lowered investment returns provides a weaker incentive for public fund managers to avoid suboptimal social investments than their private counterparts because the bearers of the cost, taxpayers, are even more diffuse group… than shareholders and are therefore even less likely to monitor a (public) pension fund’s management.” management.” Romano (1993): Public Pension Fund Activism s State statutes fix the composition of public State pension fund boards pension – – – Gubernatorial appointees (57%) Ex-officio (25%) Elected by beneficiaries (18%) s Table 3: Positive relation between fund Table earnings and proportion of...
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