Maryland State Retirement & Pension System, Baltimore, decreased its annual assumed rate of return to 7.4%, the pension fund said Friday.
The $52.7 billion system's current assumed rate of return is 7.45%. The lower rate will be effective beginning fiscal year 2021.
"The board's prudent action today is in recognition of ongoing changes in the financial markets, while continuing to achieve the investment returns required for the system over the long term," said State Treasurer Nancy K. Kopp, chair of the system's board of trustees, in a statement. "Our goal is to continue to improve the strength of our retirement system and to keep our promise of a secure retirement that our members have worked so hard to earn in their years of service to the public."
The board based its decision upon an analysis by its actuary, Gabriel, Roeder, Smith & Co., according to a press release.
As of March 31, the system's actual allocation was 50.1% growth equity, 18.2% rate sensitive, 13.9% real assets, 8.4% credit, 7.7% absolute return, 1.3% multiasset and the rest in cash.