Solvency of Pension Plans

Preparing for life after work. RRSPs, RRIFs, TFSAs, annuities and meeting future financial and psychological needs.
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ghariton
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Solvency of Pension Plans

Post by ghariton »

Public pension plans in the U.S. are still assuming rates of return, going forward, that seem awfully optimistic to me:
Public pensions still targeted a 7.5% average rate of return in 2016, according to a survey by the National Conference on Public Employee Retirement Systems (NCPERS).

The average did not change from 2015, despite a majority of funds reporting that they are at least considering revising their return assumptions.

In the survey, which polled 159 state, local, and provincial government pension funds between September and November of last year, NCPERS found that nearly 40% had decreased their actuarial assumed rate of return in 2016. A further 30% said they were considering making downward revisions in the future.

Of the pensions that did lower their return targets between 2015 and 2016, the reduction was an average of 0.26%.
Although annual returns in 2016 were just 1.7%, according to NCPERS, long-term returns were closer to current targets: Returns over 3-, 5-, and 20-years hovered around 8%, while 10-year returns were 6.2% on average.
Anyone have current information on Canadian pension plans and their assumed rate of return?

George
The juice is worth the squeeze
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Shakespeare
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Re: Solvency of Pension Plans

Post by Shakespeare »

Public pension plans in the U.S. are still assuming rates of return, going forward, that seem awfully optimistic to me:
Western governments have a large self-interest in inflation - if they can get it.
Sic transit gloria mundi. Tuesday is usually worse. - Robert A. Heinlein, Starman Jones
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