Investment update

Aubry, Jean-Pierre, and Kevin Wandrei. “Investment update”. State and Local Plans Issue in Brief 68, Chestnut Hill, Mass.: Center for Retirement Research at Boston College, September 2019. http://hdl.handle.net/2345/bc-ir:108617.
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Abstract

The brief's key findings are: A new government accounting standard requires state and local pension plans to categorize assets based on the method used to determine the fair market value. Level 1 includes frequently traded assets like equities. Level 2 includes less liquid assets like corporate bonds. Level 3 involves appraisals like real estate. For assets that lack a "readily determinable" fair market value, plans can instead use the net asset value (NAV) per share. However, it is possible to assign these "NAV assets" to Levels 1, 2, or 3 by matching them with comparable assets in each level. This reallocation shows that about one quarter of total assets are likely valued based on appraisals (Level 3), which, by definition, are more subjective.

Title
Investment update: How do public plans value their assets?
Author
Aubry, Jean-Pierre
Wandrei, Kevin
Center
Center for Retirement Research
Genre
report
Date Issued
September 2019
Publisher
Center for Retirement Research at Boston College
Series Title
State and Local Plans Issue in Brief
Series Number
68
Persistent Link
http://hdl.handle.net/2345/bc-ir:108617
Use Restrictions
These materials are made available for use in research, teaching and private study, pursuant to U.S. Copyright Law. The user must assume full responsibility for any use of the materials, including but not limited to, infringement of copyright and publication rights of reproduced materials. Any materials used for academic research or otherwise should be fully credited with the source. The publisher or original authors may retain copyright to the materials.
Subject
Financing Retirement

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