The state of public pensions in 2017
It's not getting any easier to manage public defined benefit plans.
The long-term secular decline in inflation and long-term interest rates has been a boon for past investment returns. Returns over the next 15 years will be harder to achieve without taking on significantly more risk. For instance, the Municipal Employees' Retirement System of Michigan’s long-term expected real rate of return for its global fixed-income investments is only 2.18%. The system’s expected long-term real rate of return for listed equities is 5.02%.