Despite historic 2021 returns, many public pension plans are wisely preparing for lower investment returns

In Politics by Michael Rae

Last year, investment returns for public pension systems hit record highs. The median return for state-managed plans was 27% in 2021. Despite beating investment return targets by 20% in 2021, many public pension plans are now taking the opportunity to reduce their investment risks by lowering investment return rate assumptions to more realistic long-term growth rates.

Using the latest capital market assumptions from established financial firms, Reason Foundation’s Pension Integrity Project built a portfolio simulation tool, which gives an idea of the range of returns that financial experts are expecting for pension funds for the next few decades. For a portfolio