Texas ERS decreases assumed rate of return to 7.5%

The $26 billion Employees Retirement System of Texas Board of Trustees has decreased its assumed rate of return on investment of the ERS Retirement Trust Fund to 7.5 percent, down from its previous 8 percent, the pension fund said in a statement.

The new assumed 7.5 percent rate of return provides a more realistic forecast of current and future financial conditions and allows the Texas Legislature to make better-informed decisions about future funding, said the pension fund in a statement.

The new assumed rate of return takes into account actual inflation rates and other financial information and is based on a more realistic expectation of future earnings in today’s investment climate. It will also provide a more accurate picture of Texas ERS’ long-term financial status.

Texas ERS’ defined benefit plan has not been properly funded for many years, said the pension fund in the statement. For about 20 years, starting in the early 2000s, contributions were not