Denver Employees Retirement Plan is recommending that its actuarial assumed rate of return be lowered to 7% from 7.25%.
The $2.7 billion pension fund's board voted at its July 21 meeting to recommend to Denver's city council that it approve the new rate of return, recently released meeting minutes showed.
At the July 21 meeting, Anne D. Harper, principal consulting actuary, and Tim Hall, associate actuary, both from Cheiron, the pension fund's actuarial consultant, made a presentation on the pension fund's actuarial valuation, according to the minutes.
Ms. Harper discussed lowering the actuarial assumed rate of return to 7% because the current rate is higher than the national median of peers at 7%. While lowering the assumed rate of return would lower the pension fund's funding ratio to 59.4% from 60.9%, she said reducing the return assumption "increases the margin for conservatism," according to the minutes.
The board unanimously voted for the recommendation.
Executive Director Heather K. Darlington said in an email that the board will begin the process later in September of introducing a bill to the city council to lower the rate of return.