Opinion

Public Pensions and Infrastructure: A Match Made in Heaven

Ingo Walter

By Ingo Walter and Clive Lipshitz

Our findings suggest now might be the perfect time to match pension capital with infrastructure investment needs, creating winners on both ends of the financial chain.

By Ingo Walter and Clive Lipshitz

During the State of the Union address, President Trump issued a renewed call for an infrastructure bill. Two days later, the House Committee on Transportation and Infrastructure held its first hearing of the new Congress to address the state of U.S. infrastructure.

Confronting the nation’s infrastructure gap is one of the rare bipartisan issues in Washington today. It is a priority for the American public and for elected officials at the federal, state and local levels, all of which make it a likely legislative focus for both the 116th Congress and the administration.

That U.S. infrastructure needs improvement is not news. Any discussion about closing the $2 trillion 10-year investment gap quickly zeros-in on funding — revenue streams in the form of dedicated taxes or user fees — and financing solutions.

While there are perfectly suitable public finance tools, a large pool of untapped available capital resides in the retirement funds of public-sector workers.

In a new, detailed study of the $4.3 trillion U.S. public pension system, we’ve investigated the infrastructure investments undertaken by the largest public pension systems in the country.

Our findings suggest now might be the perfect time to match pension capital with infrastructure investment needs, creating winners on both ends of the financial chain.

Read the full article in The Hill.
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Ingo Walter is a Professor Emeritus of Finance