Since the blissful ignorance of the pre-financial crisis period, public pension funds have had to deal with the reality of that lower return assumptions have hit the largest U.S. public pension plans. While the few plans that maintain 8%-plus return assumptions are in a better funded position than most, data show that plans with return targets below 7% have an average funded status of about 85%.
The majority of the plans have dropped their return assumptions by about 50 basis points to 7.5% from 8% over the 10-year period between 2006 and 2016.
