California Employee Pension Will Consider Cutting Return Assumption
ByCalpers may be getting a bit more real. The $300 billion California public employees’ pension manager is considering cutting its investment return assumption. The move would squeeze the budgets of public authorities and employees, but secure funding for retirees. If the American government pension bellwether can do it, others will follow.
Public pension funds in the United States have long relied on unrealistic investment assumptions, but the financial crisis and lackluster market performance have exposed that game. Calpers took a small step in 2012 by lowering its return assumption by 0.25 percentage point, to 7.5 percent, but the fund generated a return of just 0.61 percent in the 12 months that ended June 30. Annualized returns were 5.1 percent over the last 10 years…
California Employee Pension Will Consider Cutting Return Assumption
