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Knoxville pension plan lowers assumed rate of return

Knoxville (Tenn.) City Employees Pension Fund lowered its assumed rate of return to 7.25% from 7.375% as the result of an experience study, said Kristi Paczkowski, executive director.

The $540 million pension fund’s board approved the change at its Jan. 12 meeting based on the study, which used data from 2012 to 2016.

The pension fund’s target asset allocation is 30% fixed income, 18.5% international equities, 18% domestic equities, 10% real estate, 7.5% energy/natural resources, 5% each hedge funds, private equity and risk parity, and 1% cash.

As of June 30, the actual allocation was 31.2% fixed income, 20.1% international equities, 19.4% domestic equities, 17.4% real assets, 5.9% risk parity, 2.6% private equity, 2.4% hedge funds and the rest in cash.