Public retirement systems continued to manage expenses in fiscal 2021, with many also reducing their assumed rates of return, according to an annual study released Wednesday by the National Conference on Public Employee Retirement Systems.
In fiscal 2021, the pension systems averaged 54 basis points in administrative costs and investment manager fees, down from 60 basis points the year before.
Systems lowered their assumed rates of returns to an average 7.07%, from 7.26% a year earlier. Among all respondents, 70% said they lowered those rates of return during the year, above the 52% that had lowered their assumed rates of return in fiscal 2020.
NCPERS also said in the study that 40% of respondents raised their benefit age and service requirements, up from 32% the year before, and 37% increased employee contributions, up from 31%.
Many responding funds did not offer a cost-of-living adjustment in the most recent fiscal year, and the average adjustment was 1.7%, the same as the previous year.
NCPERS is the largest trade association for public-sector pension funds, representing more than 500 funds throughout the U.S. and Canada with more than $5 trillion in pension assets collectively.
Of the 156 state and local pension systems that responded to a survey between September and December on which the annual study is based, 53% were local systems and the rest were state systems, with a combined 17.7 million participants and more than $2.6 trillion in assets.
The 2021 NCPERS Public Retirement Systems Study, conducted with Cobalt Community Research, covered the most recent fiscal year for each plan surveyed. The study is available on NCPERS' website.
