"Public plan investment strategies are naturally focused on generating as much return as possible, but risk must be considered as well. Risk should be defined relative to the obligation to pay the promised benefits with the least impact on stakeholders such as taxpayers and creditors.... Pension plans enjoy two luxuries that can help them to achieve those objectives -- a well- defined financial obligation and a long-term horizon. These advantages can be exploited to maximize return in the most risk-efficient way. The purpose of the obligation-based approach described in this paper is to take the right type of risk in the most effective manner possible."