Aurora (Colo.) General Employees’ Retirement Plan lowered it assumed rate of return to 7.25% from 7.75%, said Thomas Connell, pension plan administrator, in an email.
The $420 million pension fund’s inflation/cost-of-living assumption was also reduced to 2.75% from 3.25%.
The changes were based on advice from the pension fund’s actuary, Milliman, and its investment consultant, Callan Associates. “Both had projected lower capital market performance over the coming 10-year period, leaving it unlikely that our portfolio would reach its previous 7.75% (return) target,” Mr. Connell wrote.
That being said, the pension fund returned a net 8% for 2016, above its benchmark return of 7.8%.