The Wall Street Journal: Pensions Wrestle With Return Rates
Turmoil in Europe, the sluggish economy and low interest rates are intensifying pressure on public pension-fund systems to reduce the annual-performance assumptions they use to determine contributions from taxpayers and employees.
Some lawmakers and pension officials are pushing to abandon the roughly 8% annual-return assumption set by many public-employee funds, saying the rate is unrealistically high given upheaval in markets around the world and the preceding financial crisis.
“After 10 years of listening to the experts be wrong on the downside more than half the time, I would like to be more cautious,” said James Dalton, chairman of the Oregon Public Employees Retirement System.
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