This book describes the operation of state and local government pension systems for teachers, explores the rationale behind current administrative and financial practices, and describes the interaction of special interest groups, pension professionals, and investment personnel with the administration of these systems. The pension systems in 23 states and 4 cities were examined through interviews with more than 200 people--including trustees, plan administrators, legislators, union officials, investment professionals, actuaries, financial consultants, academics, and others affiliated with state and local pension systems--along with review of basic retirement data and documents. After a brief introduction, chapter 2 provides an overview of the structure of the three major types of retirement systems for teachers: public corporation systems, hybrid systems, and government systems. Remaining chapters focus on the following: (1) the boards of trustees; (2) the administration of investment; (3) pensions and the legislative process; (4) the politics of public employee retirement systems and teacher unions; (5) the national focus; (6) actuarial services; (7) investment practices; and (8) performance measurement and custodial processes. The final chapter presents observations on public employee retirement systems: their structure, the influences upon them, and their future. References are included. (TE)