The Sacramento Bee reported that the CalSTRS board ultimately decided that members needed more time to digest data presented by consultant Milliman, which backed the reduction in assumed return. The board delayed a decision until November.
The newspaper said CalSTRS already plans to ask the Legislature next year for additional funding to help it recover from investment losses in 2008. CalSTRS currently gets more than $6 billion a year from the state, school districts, and teachers.
Milliman’s consultants said many pension funds are lowering their forecasts, partly to reflect the big drop in yields on government and corporate bonds in recent years, according to the newspaper.
San Diego county recently took the step, trimming its assumed rate from 8.25% to 8% (SD County Cuts Assumed Rate of Return to 8%).