Illinois Municipal lowers assumed rate of return to 7.25%

The $42.4 billion Illinois Municipal Retirement Fund’s (IMRF) board of trustees has lowered the amount it assumes IMRF will annually earn on its investment portfolio, according to meeting notes. At the recommendation of actuarial consultant GRS Retirement Consulting, the board lowered the assumption from 7.5 percent net of fees to 7.25 percent net of fees, effective Jan. 1, 2019.

IMRF has had a 7.5 percent assumption rate for 25 years and it feels that this change is consistent with market trends and actions taken by most public pension funds across the nation. Recent changes by other systems include CalPERS (7.5% to 7.0% over 3 years); CalSTRS (7.5% to 7.0% over 2 years); State of Michigan (7.5% to 7.05%); Ohio PERS (7.5% to 7.2%); and Texas Teachers (8.0% to 7.25%). In addition, 75 percent of the 129 pension plans that NASRA surveys have lowered their assumption since 2010. NASRA is a nonprofit that provides pension funds with research and education.

Expected rea