State Treasurer Nancy Kopp wrote an article on the rate of return for the State Retirement Agency’s January issue of Retiree News and Notes. The article, “Assumed rate of return: the real story,” describes how the Maryland State Retirement and Pension System assumed rate of return, currently set for 7.75% is set each year by the Pension Board of Trustees based on a long-term prediction of what the system expects to earn. According to the State Treasurer,
As a real measure, the system has done very well in meeting or exceeding its assumed rate of 7.75% over the long term. The system has earned 7.85% on average over the past 25 years as of June 30, 2012.
The recent State Retirement & Pension System Funding Study 2012 included estimates of lowering the assumed rate of return from 7.75% to 7.55% by 2016. For more discussion of rates of return, see the Treasurer’s full article.
Past related posts: