Colorado Public Employees lowers assumed rate of return

By Meaghan Kilroy for Pensions and Investments

Colorado Public Employees' Retirement Association, Denver, on Friday lowered its assumed rate of return to 7.25% from 7.5%, said a news release from the $43 billion pension fund.

Also at the Friday board meeting, the pension fund board reduced its long-term inflation expectations to 2.4% from 2.8% and adopted different mortality tables for each employer division to reflect longer life expectancies.

It is the first time the pension fund has adopted different mortality tables for each division, according to the release. (No further info)

The changes were approved following a regular review of economic and demographic assumptions from actuarial firms Cavanaugh Macdonald Consulting and Xerox HR Services and the pension fund's investment consultant, Aon Hewitt Investment Consulting.

PERA returned a net 1.5% for its fiscal year ended Dec. 31, compared to its 0.5% policy benchmark. It was 62.1% funded as of Dec. 31.

The assumption changes are expected to lengthen the amount of time it will take for the pension fund to reach
full funding, the release said. Further information was not disclosed.

Spokeswoman Katie Kaufmanis could not immediately be reached for additional information.