New York State Common Retirement Fund announced on Aug. 25 a reduction in its assumed rate of return to 5.9% from 6.8%. “The intent is to set realistic return assumptions that result in stable contribution rates at a sufficient and sustainable level for employers,” said Tania Lopez, a spokeswoman for New York Comptroller Thomas DiNapoli, who is trustee of the $268.3 billion pension plan, in an email. Given the lower-for-longer interest rate environment in the U.S. and other developed nations, the cut appears both prudent and reasonable. Unless interest rate or other assumptions change significantly, other plans will have to follow suit. But how much will plans have to cut their assumptions? Using asset allocation data from about 50 large public defined benefit plans’ 2020 comprehensive annual financial reports and using the 2021 Horizon Actuarial Services return estimates, Pensions & Investments estimates the average public plan needs to bring down its assumed rate of return by more than 1 percentage point. Using 20-year return horizon estimates mapped to 2020’s actual asset allocations, the average plan is estimated to return an annualized 5.99%.