Michael Rathbone

“Nothing ventured, nothing gained.”

This common proverb argues that one cannot expect to achieve anything without taking some risk. The amount of risk one is comfortable with differs from person to person. However, if the thing at risk is the retirement savings of thousands of public school teachers, it would be wise that managers of these teachers’ money take as few risks as possible.

Unfortunately, these managers are going in the opposite direction and placing riskier and riskier bets in order to finance teacher pension obligations. As my colleague James Shuls and I point out in our new essay, “Betting on the Big Returns: How Missouri Teacher Pension Plans Have Shifted to Riskier Assets,” each of Missouri’s public teacher pension plans have moved away from investing in safer assets such as fixed-income securities and toward riskier investments such as equities and various alternative assets.

As we state in the paper, more risk isn’t inherently a bad thing since investors are compensated for that risk with higher returns. Still, what will happen to taxpayers if some of these risky assets fail to deliver as expected? James and I cover this and more in our paper, so please give it a look.

About the Author

Michael Rathbone
Policy Researcher
Michael Rathbone was a policy researcher at the Show-Me Institute. He is a native of Saint Louis and a 2008 graduate of Saint Louis University, where he earned a bachelor of science degree in biomedical engineering.