Returning retirement

1 March 2010 By Agnes Crane

The biggest U.S. pension fund may reduce its expected return rate currently nearly 8 pct. Other states including New Jersey and Illinois also assume generous returns on pension assets. Many states are underfunded anyway; biting the bullet with realism on returns is overdue.

This content is for Subscribers only

Context News

The California Public Employees' Retirement System, known as Calpers, said on Feb. 28 it is considering a reduction of its projected rate of return from 7.75 percent due to slower global economic growth.

The nonprofit Pew Center on the States says that most U.S. states assume around an 8 percent rate of return on their pension fund assets. In a recent study on underfunded state retirement systems, the Pew Center noted that the top 100 private pensions assumed an average return of 6.36 percent.

As of June 2008, states faced a cumulative $452 billion shortfall in their pension systems, according to the Pew Center.

Email a friend

Please complete the form below.

Required fields *