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 24, 2018 12:00 AM

NCPERS: Public pension funds going more conservative in assumptions, keeping costs down

James Comtois
  • Tweet
  • Share
  • Share
  • Email
  • More
    Reprints Print

    Public pension plans continued to be more conservative in their assumptions while keeping expenses down during 2017 despite producing strong returns, said results of a survey released Wednesday by the National Conference on Public Employee Retirement Systems.

    Most respondents (85%) of the 2017 NCPERS Public Retirement Study said they have either reduced their investment return assumptions (64%) or plan to do so (21%). The average investment assumption still stood unchanged at 7.5% and the average inflation assumption ticked down to 2.9% from 3%.

    With more plans lowering assumptions, employer contribution rates have risen to 22% in 2017 from 18% in 2016. In addition, plan sponsors are becoming more diligent in making required contributions, with the percentage of funds receiving full actuarially required contributions rising to 74% from 70%.

    Public funds continue to remain cost effective. While all responding plans report the total cost of administering their funds and paying investment managers was 55 basis points in 2017, up 1 basis point over the total cost of 54 in 2016, the 86 plans that participated in both 2016 and 2017 saw their costs drop to 52 basis points.

    Aggregated annual investment returns jumped to 7.8% in 2017 from 1.5% in 2016. Returns depended on an individual plan's fiscal-year end. Longer-range returns either stayed at or near the average assumed rate of return for the universe.

    Funding levels dipped to an aggregate 71.3%. Pension plans that replied in both 2016 and 2017 have an average funding level of 72.9%, down from 74.7%.

    Also, the smoothing period for calculating investment returns continues to be shortened, dropping to five years from 5.7 years.

    The 2017 study surveyed 164 state and local government pension funds representing $1.8 trillion in assets in September to December. Of those, 62% were local funds while 38% were state plans.

    Related Articles
    Public fund trustees facing host of difficult challenges
    Private-sector retirement programs moving ahead, NCPERS says
    Public funds see major gains after frustrating years
    NCPERS: Trying to close or freeze underfunded pension plans is misguided
    Texas Teachers considering lowering rate of return; pension funds discuss compe…
    Minnesota governor signs pension bill to lower assumed rates of return, COLAs
    Census Bureau: Public pension contributions rise 4.6% in 2017, assets up 7.8%
    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
    DC Plan Design: Improving Participant Outcomes
    Sponsored Content: DC Plan Design: Improving Participant Outcomes
    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