Let’s Be Clear: Transparency Is a Choice
An assessment of public disclosure across 67 state retirement systems, measured against a standard of best practice.
Download the full paper
Transparency isn’t determined by the size of a public retirement system. It’s determined in the boardroom.
Across 67 state systems, the most transparent organization is a mid-sized investment board, not one of the giants, and several of the largest funds are among the least forthcoming on the disclosures that matter most. What separates the leaders is not resources or statute. It is a deliberate decision, made by a board, about what to disclose and how.
The short version
Using the InGov® Transparency protocol, Funston Advisory Services assessed the state retirement systems against a standard of best practice, rather than the minimum their own statutes require, scoring each on 123 criteria across 9 domains. Three findings stand out.
The foundations are strong.
Disclosure of the core elements of public accountability, namely financial reporting, actuarial funding, investment and performance reporting, and public records, is mature and broadly consistent. About a third of the systems (25 of 67) score 80 or more out of 100.
Two blind spots are nearly universal.
Disclosure of investment fees and of investment risk sits roughly thirty points below that mature core. Systems reliably report what they hold and what it is worth, but far less consistently what it costs and what they stand to lose.
Disclosure often lacks the policy that should anchor it.
Most systems have a public records or confidentiality policy, but few have a well-defined one. A system without such a policy is disclosing by habit rather than by design, and its transparency, however extensive today, can change without notice.
Transparency bears no relationship to a system’s assets, funded status, membership or governing statutes. The sector’s remaining gaps are not gaps of capacity, resources or law. They are gaps of policy, and the decision belongs to the board.
Why transparency matters
A public retirement system is a long-horizon fiduciary. Its principal advantage over shorter-term capital is the capacity to hold a sound strategy through market cycles, and that advantage rests on the accountability and stakeholder alignment it sustains through disclosure.
The assets a system manages are held in trust for members and beneficiaries. Other stakeholders do not own those assets, but each has a legitimate interest in how they are governed, and each depends on disclosure.
- Members and beneficiaries rely on it to confirm the fund is managed prudently and solely for their benefit, and that their promised benefits are secure.
- Participating employers rely on it to understand the cost and funding trajectory they share.
- The sponsoring jurisdiction relies on it to exercise oversight on the basis of evidence rather than surprise.
- Taxpayers, who ultimately stand behind the system’s promises, rely on it to judge whether the fund is managed in the public interest.
A system can be held to account only to the extent of what it makes visible. Where disclosure is lacking, accountability is weaker, not because the system is necessarily failing, but because those who depend on it cannot see enough to form a judgment.
Best practice, not the legal minimum
The assessment measures each system against a standard of evolving best practice drawn from three sources: open-meeting and open-records (“sunshine”) law; the guidance of the sector’s standard-setting bodies, including NCPERS, the GFOA, ILPA and GASB; and informed judgment about what leading systems now do where the first two have not yet reached.
That benchmark is more demanding than any single legal requirement, so a system can satisfy its statutes in full and still fall short of best practice. A lower score is not a finding of non-compliance. It measures the distance between current disclosure and the leading practice of the sector.
Each system is scored against the standard, never against its peers. The output is a diagnostic, not a leaderboard.
Transparency has its limits
Transparency is not the publication of everything a system holds. Information runs along a continuum, and only the public end of it is measured here.
- Public Assessed hereOpen, or available on request.
- BoardAlways available to the board that governs the system.
- ConfidentialMembers’ personal data, commercially sensitive terms and trade secrets.
- PrivilegedLegally privileged, such as communications with counsel.
- ProtectedWithheld even from the board, by privacy law or legal seal.
Start with the policy
Before asking how much a system discloses, ask a prior question: has it decided what it will disclose and what it will properly withhold? The instrument that records that decision is an information classification and disclosure policy, a documented, tiered scheme that sorts every record, ties each tier to the authority that governs it, and specifies how each is handled when a request arrives.
Most systems have a policy, a documented confidentiality rule and a cited legal basis for withholding. The gap is in the components that make disclosure disciplined.
The gradient runs one way: the closer a component sits to the actual exercise of discretion, the less likely a system is to have settled it in advance. A board that has drawn the boundary beforehand can disclose more precisely, and withhold the remainder defensibly, on a stated authority, rather than reflexively.
* Of the 50 systems it applies to. Member-data handling does not apply to investment-only entities.
The overall picture
Scored against best practice, the numbers are less reassuring than they may first appear. A typical score in the mid-70s means the average system already omits about one disclosure in four that best practice expects, and the least transparent omits more than half.
High averages come largely from older, well-settled disclosures such as financial and actuarial reporting. The shortfall is concentrated and shared, in investment fees, investment risk and the policy discipline behind disclosure.
- Below 50
- 50 to 64
- 65 to 79
- 80 and above
Disclosure by type of system
How a system is organized shows the clearest pattern in how much it discloses, though it is a weak predictor. The range within each type is wider than the difference between types, so structure sets a tendency, not a destiny.
- Integrated system39 systemsaverage 77.5 · median 80.5 51.788.5
- Benefits administrator11 systemsaverage 69.0 · median 74.6 45.581.9
- Investment board17 systemsaverage 65.0 · median 66.3 40.390.5
The single most transparent organization in the study is a standalone investment board, even though investment boards average lowest. Structure may explain where a system starts. It does not settle where it ends up.
Strong core, shared shortfall
Averaged across the cohort, the nine domains of disclosure fall into three tiers.
Funded status, contribution rates and member handbooks appear in the large majority of systems.
Governance varies more than any other domain, and its lagging items (a published executive-compensation policy, a ban on board business by serial private communication, and public board-meeting recordings) are low-cost, highly visible improvements.
These are also the domains in which best practice has advanced most rapidly.
On fees, the gaps concentrate in private-market cost: carried interest, incentive fees reported separately from base fees, and the internal operating costs of pooled vehicles. On risk, systems seldom publish forward-looking stress tests, a consolidated view of total-fund liquidity, or risk-adjusted performance measures.
A high public-records score and a weak classification policy can, and often do, coexist. One measures the visible act of releasing documents; the other measures the governance behind release.
A choice, not a function of scale
Disclosure was tested against the characteristics one might expect to matter: assets under management, funded status, membership and plan maturity. None is a meaningful predictor. Fund size explains less than 1% of the variation in disclosure scores, and the smallest systems disclose about as much as the largest.
Nor is disclosure simply what the law compels. Open meetings and public records, the two domains statutes govern most directly, rank only in the middle of the nine and are among the most dispersed. A legal floor secures a minimum, but it does not by itself produce leading disclosure.
Disclosure is a deliberate act. A financial report, a fee schedule, or a stress test is prepared and published. It does not appear by accident.
That places the level of disclosure within the discretion of every system, irrespective of its assets, its budget or its size.
Why act now
The two domains where the sector discloses least, fees and risk, are the two where outside expectations have risen fastest, and the direction of change has run consistently toward more disclosure. The choice is rarely between disclosing and not disclosing. It is between disclosing on the board’s own terms and being required to disclose on terms set by others.
- 2014SEC staff report violations of law or material control weaknesses in fees and expenses at more than half of the private-equity advisers examined.
- 2015One of the nation’s largest systems acknowledges it had not been tracking the carried interest paid to its managers.
- 2016California requires its public pension systems to collect and publish private-equity fees, expenses and carried interest each year. ILPA introduces a standardized fee-reporting template.
- 2018The actuarial standard ASOP 51 takes effect, requiring pension actuaries to assess and disclose the risks that could affect a plan’s funding.
- 2023The SEC adopts rules requiring quarterly statements of private-fund fees, expenses and performance.
- 2024A federal court vacates those rules, but the direction they represented has not reversed.
- 2026Seven states (California, Colorado, Connecticut, Hawaii, New Jersey, Virginia and Washington) have enacted stress-testing or risk-reporting requirements.
Journalists, watchdogs and beneficiaries have pursued fee and performance data through records requests and litigation.
The pattern is a one-way ratchet. Once a leading system or a single state adopts a disclosure, it becomes the baseline. Systems that moved early helped shape the standard. Systems that waited were compelled into a format designed by someone else. Because the best-practice standards for fees and risk are already published and widely endorsed, a visible gap there is no longer a neutral choice. Voluntary disclosure converts an eventual obligation into a present credential.
What boards can do
Start with the policy.
Adopting a tiered classification and disclosure policy, tied to authority and committed to least-restrictive release, is the single most foundational step a board can take.
Build on sound fundamentals.
Core financial, actuarial and records disclosure is mature. The question is no longer whether to disclose, but whether to extend disclosure to fees and risk.
Lead on fees and risk.
Fuller disclosure of private-market cost, and more complete forward-looking risk and liquidity reporting, is where nearly every system has room to improve, and where improvement would most strengthen public confidence.
Act at any size.
The range within every group is wide. Leading disclosure is demonstrably achievable at any size and under any structure.
Transparency is ultimately a decision of the board.
How the assessment works
Every assessment is built only from a system’s own public record: its website, financial reports, actuarial valuations, board materials and governance policies. Every affirmative finding is anchored to a verbatim citation, and where the record is silent the item is scored conservatively. Criteria outside a system’s mandate are excluded rather than counted against it.
The cohort is 67 statewide systems: 39 integrated systems, 17 standalone investment boards and 11 standalone benefits administrators. Findings reflect public information as of the July 2026 InGov® scoring. Scores measure disclosure against best practice, not compliance with law, and are a diagnostic rather than a judgment of governance quality or investment performance. Differences of a few points between systems should not be over-interpreted.
The 67 systems in the benchmark
Integrated systems (39)
- Arizona Public Safety Personnel Retirement System
- Arizona State Retirement System
- California Public Employees' Retirement System
- California State Teachers' Retirement System
- District of Columbia Retirement Board
- Employees Retirement System of Texas
- Employees' Retirement System of Georgia
- Employees' Retirement System of the State of Hawaii
- Illinois Municipal Retirement Fund
- Indiana Public Retirement System
- Iowa Public Employees' Retirement System
- Maine Public Employees Retirement System
- Maryland State Retirement and Pension System
- Missouri Local Government Employees' Retirement System
- Missouri State Employees' Retirement System
- MoDOT & Patrol Employees' Retirement System (MPERS)
- Municipal Employees' Retirement System of Michigan
- New Hampshire Retirement System
- New York State Teachers' Retirement System
- Ohio Highway Patrol Retirement System
- Ohio Police & Fire Pension Fund
- Oklahoma Public Employees Retirement System
- Pennsylvania Public School Employees' Retirement System
- Pennsylvania State Employees' Retirement System
- Public Employees Retirement Association of New Mexico
- Public Employees' Retirement System of Mississippi
- PSRS/PEERS of Missouri
- Retirement Systems of Alabama
- School Employees Retirement System of Ohio
- State Teachers Retirement System of Ohio
- Teacher Retirement System of Texas
- Teachers' Retirement System of Oklahoma
- Teachers' Retirement System of the State of Illinois
- Tennessee Consolidated Retirement System
- Texas County & District Retirement System
- Texas Municipal Retirement System
- Utah Retirement Systems
- Virginia Retirement System
- Wyoming Retirement System
Investment boards (17)
- Connecticut Retirement Plans and Trust Funds
- Illinois State Board of Investment
- Massachusetts Pension Reserves Investment Management Board
- Minnesota State Board of Investment
- Montana Board of Investments
- Nebraska Investment Council
- New Jersey State Investment Council
- North Dakota State Investment Board
- Oregon Investment Council
- Rhode Island State Investment Commission
- South Carolina Retirement System Investment Commission
- South Dakota Investment Council
- State Board of Administration of Florida
- State of Wisconsin Investment Board
- Vermont Pension Investment Commission
- Washington State Investment Board
- West Virginia Investment Management Board
Benefits administrators (11)
- Connecticut Municipal Employees' Retirement System
- Connecticut Teachers' Retirement Board
- Employees' Retirement System of Rhode Island
- Montana Public Employees' Retirement Administration
- Montana Teachers' Retirement System
- Nebraska Public Employees Retirement System
- New Jersey Division of Pensions and Benefits
- North Dakota Teachers' Fund for Retirement
- Oregon Public Employees Retirement System
- South Dakota Retirement System
- West Virginia Consolidated Public Retirement Board
Sources
- NCPERS, Best Governance Practices for Public Retirement Systems; GFOA best-practice guidance on public pension and OPEB disclosure; ILPA Principles and reporting templates; GASB Statements No. 67 and No. 68.
- Andrew J. Bowden, Director, SEC Office of Compliance Inspections and Examinations, “Spreading Sunshine in Private Equity,” Private Fund Compliance Forum, New York, May 6, 2014.
- California Public Employees’ Retirement System, public acknowledgment on carried interest, November 2015.
- California Assembly Bill 2833 (2016), California Government Code section 7514.7, effective January 1, 2017.
- Institutional Limited Partners Association, Fee Reporting Template, introduced January 2016.
- U.S. Securities and Exchange Commission, “SEC Enhances the Regulation of Private Fund Advisers,” Press Release 2023-155 (Aug. 23, 2023); Release No. IA-6383.
- National Association of Private Fund Managers v. SEC, No. 23-60471 (5th Cir. June 5, 2024).
- Actuarial Standards Board, ASOP No. 51, effective for measurement dates on or after November 1, 2018.
- The Pew Charitable Trusts, “Stress Testing Can Help Troubled State Public Pension Funds” (June 6, 2018).
By Frederick (Rick) Funston, Evan Norton and Ross Cioffi. Reviewed by Matthew Jacobs, JD, and Keith Johnson, JD. InGov® Transparency Assessment, Version 3.0. Not legal, investment or actuarial advice.