The Pension Research Council
Working Paper

The Case Against Stock in Public Pension Funds

Lawrence N. Bader and Jeremy Gold
WP2004-20

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Abstract

A government has $1 million of stock in a pension fund that covers its employees. The liability can be matched with a $1-million dedicated bond portfolio. What are the consequences of shifting the pension fund from equities to bonds? The paragraph above duplicates the opening paragraph of The Case Against Stock in Corporate Pension Funds (Bader 2003), except that we have substituted a governmental plan for a corporate plan. Does this substitution matter?