As U.S. pension plans increasingly represent an important and sticky source of assets for hedge fund managers, it is imperative for managers to understand the evolution of pension plan organization and management as well as the legal obligations borne by pension plan trustees when delegating investment decision-making to, among others, hedge fund managers. Understanding these parameters of prudent delegation can help managers respond more effectively to the needs of pension plans and their trustees, which will be essential in their quest to raise and retain capital from such pension plans. To aid in this understanding, we are publishing this three-part series addressing the evolution of U.S. pension plan management and governance. Part one highlights how growth of public pension plans and fundamental legal or regulatory change, when combined with increasing pension portfolio complexity and the current underfunded status of most U.S. public pension plans, will be the forces defining pension evolution in the twenty-first century. For the reader’s reference, part one also includes, as Appendix A, an explanation of why the growth of public pension plans and fundamental legal or regulatory change impacted pension plan evolution through the twentieth century. Part two will describe the current governance structures of today’s public pension, focusing on the board of trustees and pension staff; briefly review current governance research about public pension trustees, and the importance of both adequate staff infrastructure and effective delegation as features of good governance; and explain the new delegation rule and why it should be a key element of long-term organizational change within the U.S. pension system. Part three will focus on what the next phase of pension evolution may look like and also highlight at least how, in one area, governance research can be developed to be a true value-added tool for public pension plans and their trustees, potentially guiding the design of their governance structures and investment infrastructures. The author of this series is Von M. Hughes, a Managing Director at Pacific Alternative Asset Management Company, LLC.