Investment Risk-Taking by Public Pension Plans: Potential Consequences for Pension Funds, State and Local Governments, and Stakeholders in Government

Public pension plans in the United States have $3.8 trillion of invested assets, more than two- thirds of which are in equities and similar assets. Unlike private pension funds, public pension funds have increased their equity allocations dramatically over the last two decades, making their investment returns and unexpected investment gains and losses far more volatile than before. This means that plan funded status and contributions requested of governments also are more volatile than before, increasing the risks to taxpayers, stakeholders in government services and investments, and workers and retirees. One important way to examine the impact of investment-return volatility upon plan funded status and contributions is with a stochastic simulation model that draws investment returns from a probability distribution. We have constructed a pension simulation does that, and we use it to examine the interplay between investment return volatility and funding policy, and to examine the potential consequences of different investment return environments

Analyzing the Interplay Between Public Pension Finances and Government Finances: Lessons from Linking an Economic Model to a Pension Fund Model

Public pension funds invest in stock, bonds, and other assets in an effort to keep the costs to governments of funding pensions low. Researchers have examined the investment-related risks to public pension funds, to the governments that contribute to them, and to stakeholders in pension funds and governments, using stochastic simulation models of pension fund finances. These models generally use simple investment return assumptions, such as that returns are drawn from a normal distribution, are independent from year to year, and are not correlated with the governmental tax revenue needed to pay pension contributions. Because investment returns and tax revenue may both be correlated with underlying economic conditions, this could understate the risks that future increased contributions will be difficult to afford: a poor economy may dampen investment returns and cause tax revenue to fall short, compounding fiscal pressures on governments if the increases come when tax revenues are low. This paper addresses this issue by using a regime-switching macroeconomic model of recession and growth to drive (1) a model of pension fund returns driven by stock and bond returns, and (2) models of state tax revenue driven by real GDP and stock returns, which influence the capital gains component of income taxes. It is parameterized using retrospective and prospective estimates. It shows that the correlated risk is real and significant, meaning that political risks related to pensions are greater than often understood. The models show that these risks are greatest for governments that rely heavily on income taxes

Human Development in East and Southeast Asian Economies: 1990-2010

This report reviews patterns and trends in human development (HD) in East and Southeast Asia (ESA) since 1990, analyzes causes and consequences of this development, highlighting both structural and institutional factors, and identifies the basic principles for durable enhancements in HD. The basic arguments are that most ESA economies have experienced rapid socioeconomic structural changes through industrialization and urbanization in the last two decades. From a HD perspective, these processes offer enormous room for expanding people's capabilities. However, to successfully seize such opportunities, appropriate institutions and public policies are needed, and so is public participation in policy making and implementation. Public policies are also important for equitable distribution of the expanded opportunities, which in turn contribute to the legitimacy of institutions and social cohesion. And while industrialization does often cause more environmental pollution, technological advances also offer the means to reduce such pollution, so long as appropriate environmental policies are implemented to ensure the use of such cleaner technologies. Subject to such appropriate public policies, in net terms industrialization and urbanization should expand people's capabilities and ensure sustainable HD. Six principles are critical to a successful HD strategy-agricultural and rural development to facilitate structural transformation and to increase employment; human capital accumulation to promote continued economic and income growth; inclusive urbanization to reduce dualism and enhance social integration; cleaner industrialization to ensure sustainability; people's participation and empowerment to improve decision making and governance; closer regional and international cooperation to ensure a better future for all on our fragile planet.Human Development, Structural Factors, Public Policy, East and Southeast Asia

Transcription factor family‐specific DNA shape readout revealed by quantitative specificity models

Transcription factors (TFs) achieve DNA-binding specificity through contacts with functional groups of bases (base readout) and readout of structural properties of the double helix (shape readout). Currently, it remains unclear whether DNA shape readout is utilized by only a few selected TF families, or whether this mechanism is used extensively by most TF families. We resequenced data from previously published HT-SELEX experiments, the most extensive mammalian TF–DNA binding data available to date. Using these data, we demonstrated the contributions of DNA shape readout across diverse TF families and its importance in core motif-flanking regions. Statistical machine-learning models combined with feature-selection techniques helped to reveal the nucleotide position-dependent DNA shape readout in TF-binding sites and the TF family-specific position dependence. Based on these results, we proposed novel DNA shape logos to visualize the DNA shape preferences of TFs. Overall, this work suggests a way of obtaining mechanistic insights into TF–DNA binding without relying on experimentally solved all-atom structures

Modular discovery of monomeric and dimeric transcription factor binding motifs for large data sets

In some dimeric cases of transcription factor (TF) binding, the specificity of dimeric motifs has been observed to differ notably from what would be expected were the two factors to bind to DNA independently of each other. Current motif discovery methods are unable to learn monomeric and dimeric motifs in modular fashion such that deviations from the expected motif would become explicit and the noise from dimeric occurrences would not corrupt monomeric models. We propose a novel modeling technique and an expectation maximization algorithm, implemented as software tool MODER, for discovering monomeric TF binding motifs and their dimeric combinations. Given training data and seeds for monomeric motifs, the algorithm learns in the same probabilistic framework a mixture model which represents monomeric motifs as standard position-specific probability matrices (PPMs), and dimeric motifs as pairs of monomeric PPMs, with associated orientation and spacing preferences. For dimers the model represents deviations from pure modular model of two independent monomers, thus making co-operative binding effects explicit. MODER can analyze in reasonable time tens of Mbps of training data. We validated the tool on HT-SELEX and ChIP-seq data. Our findings include some TFs whose expected model has palindromic symmetry but the observed model is directional.Peer reviewe

Binding specificities of human RNA-binding proteins toward structured and linear RNA sequences

RNA-binding proteins (RBPs) regulate RNA metabolism at multiple levels by affecting splicing of nascent transcripts, RNA folding, base modification, transport, localization, translation, and stability. Despite their central role in RNA function, the RNA-binding specificities of most RBPs remain unknown or incompletely defined. To address this, we have assembled a genome-scale collection of RBPs and their RNA-binding domains (RBDs) and assessed their specificities using high-through-put RNA-SELEX (HTR-SELEX). Approximately 70% of RBPs for which we obtained a motif bound to short linear sequenc-es, whereas similar to 30% preferred structured motifs folding into stem-loops. We also found that many RBPs can bind to multiple distinctly different motifs. Analysis of the matches of the motifs in human genomic sequences suggested novel roles for many RBPs. We found that three cytoplasmic proteins-ZC3H12A, ZC3H12B, and ZC3H12C-bound to motifs resembling the splice donor sequence, suggesting that these proteins are involved in degradation of cytoplasmic viral and/or unspliced transcripts. Structural analysis revealed that the RNA motif was not bound by the conventional C3H1 RNA-binding domain of ZC3H12B. Instead, the RNA motif was bound by the ZC3H12B's PilT N terminus (PIN) RNase domain, revealing a po-tential mechanism by which unconventional RBDs containing active sites or molecule-binding pockets could interact with short, structured RNA molecules. Our collection containing 145 high-resolution binding specificity models for 86 RBPs is the largest systematic resource for the analysis of human RBPs and will greatly facilitate future analysis of the various bi-ological roles of this important class of proteins.Peer reviewe

Structural insights into the DNA-binding specificity of E2F family transcription factors

The mammalian cell cycle is controlled by the E2F family of transcription factors. Typical E2Fs bind to DNA as heterodimers with the related dimerization partner (DP) proteins, whereas the atypical E2Fs, E2F7 and E2F8 contain two DNA-binding domains (DBDs) and act as repressors. To understand the mechanism of repression, we have resolved the structure of E2F8 in complex with DNA at atomic resolution. We find that the first and second DBDs of E2F8 resemble the DBDs of typical E2F and DP proteins, respectively. Using molecular dynamics simulations, biochemical affinity measurements and chromatin immunoprecipitation, we further show that both atypical and typical E2Fs bind to similar DNA sequences in vitro and in vivo. Our results represent the first crystal structure of an E2F protein with two DBDs, and reveal the mechanism by which atypical E2Fs can repress canonical E2F target genes and exert their negative influence on cell cycle progression.Peer reviewe

SalMotifDB:a tool for analyzing putative transcription factor binding sites in salmonid genomes

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