Michigan Funding Its Pensions, Using More Realistic Numbers [Michigan Capitol Confidential]

Michigan Funding Its Pensions, Using More Realistic Numbers [Michigan Capitol Confidential]:
"The level of underfunding in Michigan’s public school pension system increased again last year, but this time it wasn’t because officials failed to deposit the right amount into the system.
Unfunded liabilities in the Michigan Public School Employees Retirement System increased from $29.1 billion to $29.4 billion in 2017, according to the annual report released by the state.
The increase was due to using a more conservative estimate of future investment returns.
The estimate is used when determining how much needs to be contributed to the fund now to make future pension payouts, so a more conservative one leads to more realistic contribution levels.
“The assumed rate of return on the pension plan was lowered from 7.50 percent to 7.05 percent, which is a smart fiscal decision that reduces risk to the system,” said Kurt Weiss, spokesman for the Michigan Department of Technology, Management and Budget, in an email..."
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