Skip to main content
MENU
Subscribe
  • Sign Up Free
  • LOGIN
  • Subscribe
  • Topics
    • Alternatives
    • Artificial Intelligence
    • Consultants
    • Defined Contribution
    • ESG
    • ETFs
    • Face to Face
    • Hedge Funds
    • Industry Voices
    • Investing
    • Money Management
    • Partner Content
    • Pension Funds
    • Private Equity
    • Real Estate
    • Regulation
    • SECURE 2.0
    • Special Reports
    • Washington
    • White Papers
  • Rankings & Awards
    • 1,000 Largest Retirement Plans
    • Top-Performing Managers
    • Largest Money Managers
    • DC Money Managers
    • DC Record Keepers
    • Largest Hedge Fund Managers
    • World's Largest Retirement Funds
    • Best Places to Work in Money Management
    • Excellence & Innovation Awards
    • WPS Innovation Awards
    • Influential Women in Institutional Investing 2023
    • Eddy Awards
  • ETFs
    • Latest ETF News
    • Fund Screener
    • Education Center
    • Equities
    • Fixed Income
    • Commodities
    • Actively Managed
    • Alternatives
    • ESG Rated
  • ESG
    • Latest ESG News
    • The Institutional Investor’s Guide to ESG Investing
    • ESG Sustainability - Gaining Momentum
    • ESG Investing | Industry Brief
    • Innovation in ESG Investing
    • 2023 ESG Investing Conference
    • ESG Rated ETFs
    • Divestment Database
  • Defined Contribution
    • Latest DC News
    • The Plan Sponsor's Guide to Retirement Income
    • DC Money Manager Rankings
    • DC Record Keeper Rankings
    • Innovations in DC
    • DC Plan Design: Improving Participant Outcomes
    • 2023 Defined Contribution East Conference
  • Searches & Hires
    • Latest Searches & Hires News
    • Searches & Hires Database
    • RFPs
  • Research Center
    • The P&I Research Center
    • Earnings Tracker
    • Endowment Returns Tracker
    • Corporate Pension Contribution Tracker
    • Pension Fund Returns Tracker
    • Pension Risk Transfer Database
  • Careers
  • Events
    • View All Conferences
    • View All Webinars
Breadcrumb
  1. Home
  2. PENSION FUNDS
January 08, 2018 12:00 AM

NASRA says N.J. reduction has company

Robert Steyer
  • Tweet
  • Share
  • Share
  • Email
  • More
    Reprints Print

    The reduction in the assumed rate of return for the New Jersey Pension Fund, Trenton, although dramatic, is part of a continuing trend of rate revisions by public pension plans.

    "Normally, we see a more typical change of 25 basis points," said Keith Brainard, the Georgetown, Texas-based research director at the National Association of State Retirement Administrators, whose organization says at least 35 public plans have cut their rates since early last year.

    New Jersey Treasurer Ford Scudder reduced the $76.6 billion state pension fund's rate to 7.65% from 7.9% in February 2017 for the fiscal year that started July 1, 2017. Last month, he cut the rate to 7% for the upcoming fiscal year.

    "We have seen this trend continuing unabated," said Mr. Brainard, referring to the rate reductions. Plan executives cite as reasons their projections that equity returns will be lower and interest rates will remain relatively low, he said.

    When plans announce big changes in rate return assumptions, "it's pre-announced and graduated," as with the two large California public pension plans, he said.

    The $221.7 billion California State Teachers' Retirement System, West Sacramento, announced in February 2017 that it would cut its assumed rate of return to 7.25% from 7.5% on July 1, 2017, and to 7% as of July 1, 2018.

    In December 2016, the now $348.7 billion California Public Employees' Retirement System, Sacramento, announced it would reduce its rate to 7% from 7.5% over the three fiscal years beginning in July 1, 2017.

    New Jersey's announcement in less than a year of an aggregate reduction of 90 basis points is "unusual," said Mr. Brainard.

    NASRA last published a formal study of assumed rates of return in February 2017, and an updated version will be published next month, said Alex Brown, the association's Washington-based research manager.

    In the 2017 study, NASRA found 53 state and local public pension plans had assumed rates of return between 7% and 7.5%, while 52 had rates between 7.5% and 8%. Another 19 had rates of 7% or less, while three had rates higher than 8%.

    Preliminary updated results show the number of plans with rates between 7% and 7.5% has climbed to 62, while the number of plans at 7% or less has jumped to 29. Also, the number of plans with rates of 7.5% to 8% has dropped to 35, Mr. Brown said, and only one has a rate higher than 8%.

    Related Articles
    Unfunded pension liabilities factor into some states' poor grades on legacy cos…
    Christie panel says only benefit cuts can fix New Jersey Pension Fund
    Fitch: States' net pension liabilities rise in FY 2016; Illinois tops list
    New Jersey lowers assumed rate of return to 7%
    Fiscal woes greeting N.J. governor
    Fiscal woes greeting N.J. governor
    Recommended for You
    A Canadian flag flies over Granville Island Public Market in Vancouver, British Columbia
    Canadian DB plans' solvency ratio ticks up in Q3 – Mercer
    Alecta_Building_Sign_i.jpg
    Alecta chair departs after Silicon Valley Bank fallout
    Iowa_State_Capitol_i.jpg
    Iowa Public Employees narrows absolute-return search to 7 finalists
    Research for Institutional Money Management
    Sponsored Content: Research for Institutional Money Management
    Sponsored
    White Papers
    Exploring the Commercial Application of Artificial Intelligence
    Conflict Minerals: The human cost of our electronics
    Research for Institutional Money Management
    Private real estate entry points emerging amid selloff
    2023 Hot Topics in Retirement and Financial Wellbeing
    Bonds: Shaken, but Not Stirred
    View More
    Sponsored Content
    Partner Content
    The Industrialization of ESG Investment
    For institutional investors, ETFs can make meeting liquidity needs easier
    Gold: the most effective commodity investment
    2021 Investment Outlook | Investing Beyond the Pandemic: A Reset for Portfolios
    Ten ways retirement plan professionals add value to plan sponsors
    Gold: an efficient hedge
    View More
    E-MAIL NEWSLETTERS

    Sign up and get the best of News delivered straight to your email inbox, free of charge. Choose your news – we will deliver.

    Subscribe Today
    December 12, 2022 page one

    Get access to the news, research and analysis of events affecting the retirement and institutional money management businesses from a worldwide network of reporters and editors.

    Subscribe
    Connect With Us
    • RSS
    • Twitter
    • Facebook
    • LinkedIn

    Our Mission

    To consistently deliver news, research and analysis to the executives who manage the flow of funds in the institutional investment market.

    About Us

    Main Office
    685 Third Avenue
    Tenth Floor
    New York, NY 10017-4036

    Chicago Office
    130 E. Randolph St.
    Suite 3200
    Chicago, IL 60601

    Contact Us

    Careers at Crain

    About Pensions & Investments

     

    Advertising
    • Media Kit
    • P&I Custom Content
    • P&I Careers | Post a Job
    • Reprints & Permissions
    Resources
    • Subscribe
    • Newsletters
    • FAQ
    • P&I Research Center
    • Site map
    • Staff Directory
    Legal
    • Privacy Policy
    • Terms and Conditions
    • Privacy Request
    Pensions & Investments
    Copyright © 1996-2023. Crain Communications, Inc. All Rights Reserved.
    • Topics
      • Alternatives
      • Artificial Intelligence
      • Consultants
      • Defined Contribution
      • ESG
      • ETFs
      • Face to Face
      • Hedge Funds
      • Industry Voices
      • Investing
      • Money Management
      • Partner Content
      • Pension Funds
      • Private Equity
      • Real Estate
      • Regulation
      • SECURE 2.0
      • Special Reports
      • Washington
      • White Papers
    • Rankings & Awards
      • 1,000 Largest Retirement Plans
      • Top-Performing Managers
      • Largest Money Managers
      • DC Money Managers
      • DC Record Keepers
      • Largest Hedge Fund Managers
      • World's Largest Retirement Funds
      • Best Places to Work in Money Management
      • Excellence & Innovation Awards
      • WPS Innovation Awards
      • Influential Women in Institutional Investing 2023
      • Eddy Awards
    • ETFs
      • Latest ETF News
      • Fund Screener
      • Education Center
      • Equities
      • Fixed Income
      • Commodities
      • Actively Managed
      • Alternatives
      • ESG Rated
    • ESG
      • Latest ESG News
      • The Institutional Investor’s Guide to ESG Investing
      • ESG Sustainability - Gaining Momentum
      • ESG Investing | Industry Brief
      • Innovation in ESG Investing
      • 2023 ESG Investing Conference
      • ESG Rated ETFs
      • Divestment Database
    • Defined Contribution
      • Latest DC News
      • The Plan Sponsor's Guide to Retirement Income
      • DC Money Manager Rankings
      • DC Record Keeper Rankings
      • Innovations in DC
      • DC Plan Design: Improving Participant Outcomes
      • 2023 Defined Contribution East Conference
    • Searches & Hires
      • Latest Searches & Hires News
      • Searches & Hires Database
      • RFPs
    • Research Center
      • The P&I Research Center
      • Earnings Tracker
      • Endowment Returns Tracker
      • Corporate Pension Contribution Tracker
      • Pension Fund Returns Tracker
      • Pension Risk Transfer Database
    • Careers
    • Events
      • View All Conferences
      • View All Webinars