CHAPTER<br > THE SEPARATION OF FUND AND STATE:<br > FULFILLING THE PROMISE OF THE FUTURE<br > Robert J. Hermann<br >~， perff>rmance of public pension plans will suffer if left in the hands of<br >~.，Micians and government administrators. Bureaucrats live from budget<br >， !，udget year， politicians live from election to election， but the pension<br >i"{mfise must be fulfilled for many years into the future--long beyond the<br >，~ v :rod political concerns of current government officials. 1 believe th/.s i，<br >.~ compelling argument for the separation of public pension funds from the<br >，~-nt bureaucrats who traditionally have managed them.<br >-xperience of the Los Angeles County Employees Retirement Associatl，，~<br > Lk) demonstrates that independence can greatly increase investment<br > that benefit both retirees and government， while political control ru;w<br >dy to increased taxes. Our example may encourage other public tim，Is to<br > themselves from political control. No matter which part of the United<br > government official represents or which level--city， county or state--h~.<br >{overns， bureaucrets share simila~ characteristics. When it comes to public<br > funds， many still hck the cotmlge to make tough choices and decisions，<br > making pension assets vulnerable to raids. Governments conveniently<br >hat once assets are transferred to the pension fund， they are no longer<br >hut trust， funds.<br >erous state and local pension funds throughout America are still manipu-<br > politicians and bureaucrats. One way governments try to keep control of<br >)ension funds and their administration is through the ex officio board<br >， usually the treasurer. Most public pension funds operate as a separate<br >~ent within the county， state or city treasurer s office， with employees<br >g to the ex officio member. Governments need to recognize and respect<br >}lic pension fund trustees are fiduciaries whose sole purpose is to serve the<br >ticip rots anti thmr bure ~t trots shot d refrain<br >." t beneficiaries. Politicians and { " t s " "<br >)]ecting fiduciaries to political or legislative restraints that could under-<br >-qr objectivity.<br >politicians and bureaucrats， thinking that government pension fimds are<br >