Actuarial convention has the effect of driving equity allocations of public pension plans upward. It also pushes the risk of pension funding onto future generations of taxpayers, which has fostered taxpayer discontent. Yet, pension plans in the public sector have much to offer in terms of design features, benefit security, cost effectiveness, and investment performance. Ideally, they will evolve into quasi-autonomous financial institutions. For this to happen, they will have to (1) mark assets and liabilities to market, (2) implement funding and benefit-improvement disciplines, and (3) cease to pursue social, political, and economic development ends.