U.S. Public Pension Pilot Working Group Announcement

Over the last several months, we have spoken to many organizations including public pension systems, associations, ratings and analytics firms and regulators about our governance research and, more critically, finding ways to strengthen our public-sector governance system for the benefit of current and future public employees and retirees, governments, taxpayers and municipal bond investors. The real impact for improving governance practices is its potential impact on returns. We estimate that a one unit improvement in governance, can result in an as much as a 0.36% increase in annual investment returns. Over time that could translate into very significant improvements in the long-term sustainability of the organizations, as organizations progress toward a first quintile set of best practices.

We are now at a stage, working in conjunction with Marquette University, where we are forming a working group to expand data collection, reporting and dissemination of public sector governance data. The initial five-year study established empirical coverage of approximately 25% of the public pension sector by assets. In this pilot phase we are looking to expand our survey coverage to 50% of the sector by assets (for both public pensions and OPEBs), which will include most of the U.S. states and many of the largest cities and municipalities.Participants will receive the FEQ(TM) (Fiduciary Effectiveness Quotient – governance index score) survey. We expect to disseminate the survey to roughly 200 organizations, again representing around 50% of total U.S. public pension system assets. There is no cost for participation, and each participant will receive a complimentary report, containing their FEQ score and peer group benchmarking report, as well as the option to receive the full FEQ report and GSAC (Governance Self Assessment Checklist) survey, reporting and governance portal access at a discounted rate.

We would like to confirm group participation by March 1, 2018. For your participation, we need only from you a contact list of survey recipients (e.g. name of org., contact person, title, contact email and phone number). We recommend the most senior staff person in the organization be identified as the respondent, and the survey only takes about 20-30 minutes to complete. We anticipate the survey will be distributed by June and reporting to each group will be completed by September 30, 2018.

Please contact cmerker@fundgovernanceanalytics.com (Chris Merker) to submit your request for participation.

Author: Christopher K. Merker, Ph.D., CFA

Christopher K. Merker, PhD, CFA, is a director with Robert W. Baird & Co. Merker holds a PhD in Investment Governance and Fiduciary Effectiveness from Marquette University. He is a past president of the CFA Society Milwaukee and a current board member. An adjunct professor of finance at Marquette University, where he teaches the investment course, Sustainable Finance, he is also executive director of Fund Governance Analytics, LLC, a provider of governance research and diagnostic tools for issuers, asset owners and institutional investors. He publishes the blog, Sustainable Finance, which covers current topics around sustainability in investing (www.sustainablefinanceblog.org)