Investment markets aren’t what they used to be. In a RiskFirst survey reported on by Pensions & Investments, the vast majority of U.S. pension funds indicated to the National Association of State Retirement Administrators they have abandoned hopes of 8.00 percent return targets and have scaled back those expectations to 7.25 percent.

“There’s wide variations, but there is a fair amount of clustering [among return assumptions in the NASRA database],” Alex Brown, NASRA’s research director tells P&I. Three-fourths of the state plans have rates ranging from 7.0 percent to 7.5 percent.

During the past decade, the downward shift of returns and aging populations have upended traditional thinking about portfolio construction. The asset mix of roughly 60 percent equities and 40 percent fixed income so many conservative investors are accustomed to is giving way to a new reality — lower returns for each category and even negative returns for a growing segment