Here is an excellent blog post about the percentage of public pension income from investment returns. The average for all public pension plans is about 60% of income is from investment returns.
That’s why the investment assumption is so important. It needs to be realistic to get a true sense of how PERS will perform in the future. And as Kingfish regularly hammers on Jackson Jambalaya, the projections for future participants in the system also has to be realistic.
A lot of experts believe an investment assumption of 7.75% (which PERS uses), is not realistic. But opinions can differ on that.
Reasonable opinions can’t differ on the number of PERS participants. The trend of more retirees in the system than new hires entering the system isn’t going anywhere.
Some people might blame this on Republicans shrinking government. Perhaps. But government should not be immune from technological advances that mean it takes fewer people to perform administrative work. Regardless, it doesn’t matter.
PERS participants are decreasing. PERS’ future assumptions need to reflect it. Future investment assumptions should be realistic–not aspirational. Fixing these issues would expose how bad of shape PERS is really in and force the government to change the system.