Challenges in Pension Governance

As the scope of the current financial
crisis dwarfs the recession of 1991, public retirement
systems face momentous pressures. In a number of cases,
the roots of these funding problems can be traced to
actions taken during the recession 18 years earlier. This
study of the New Hampshire Retirement System chronicles a
series of events in 1991-92 which led to a $2.4 billion
unfunded liability by 2007. The study depicts trustees,
legislators and stakeholders in crisis. Transcripts and
interviews give readers an inside view of a struggle to
adhere to fiduciary duty in the face of relentless
political pressure. Events in New Hampshire during the
recession of 1991 were not unique; researchers found that a
number of states sought to balance budgets by reducing
pension contributions during that period. This study sets
New Hampshire's experience in the context of those findings
as it portrays a system of pension governance under stress.
Now, the impending retirement of the Baby Boomers coincides
with a global financial crisis. This examination of the
past may serve to inform the present, as public pension
systems face the challenges ahead.