Pennsylvania Municipal Retirement System, Harrisburg, lowered its assumed rate of return to 5.5%, effective Jan. 1, said James Allen, secretary of the $1.6 billion pension fund.
The board accepted the recommendation of Cheiron, the pension fund's actuarial consultant, Mr. Allen said, adding that the rate is “very conservative.”
The rate has been at 6% since 2005.
The lower rate could mean the 950 municipal plans belonging to the retirement system will have to raise contributions, but will also increase the likelihood the retirement system's investment returns can reach and exceed the assumption, Mr. Allen said.
