Benefits & Executive Compensation News

Largest U.S. State Pension Funds Cut Assumed Returns: Pew

Dec. 19, 2019, 7:26 PM

The largest state pension plans are reducing their investment portfolio return assumptions amid an expected slowdown in economic growth, according to a report Thursday by Pew Charitable Trusts.

  • Pew expects a typical pension fund portfolio’s median long-term return to be 6.4% a year, less than historical expectations
    • “Forecasts of lower-than-historical economic growth and bond yields over the next 10 to 20 years drive the growing consensus among government and industry economists that pension funds will see lower long-term investment returns and suggest a new normal for public fund investments,” according to the report
  • The average assumed rate of return...

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