How do public pension plan returns compare to simple index investing?

Abstract

The brief's key findings are: (1) Public pension plans are increasingly relying on alternative investments and active management. (2) But how does plan performance compare to a simple 60/40 index over various periods from 2000-2023? (3) Over the full period, plan returns are virtually identical to the simple index strategy, but plans have done much worse since the Global Financial Crisis. (4) If the current approach doesn't yield higher long-term returns, a strong argument can be made for sticking with a simple, transparent strategy.