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Assumed Rate of Return

Assumed rate of return is the single most important assumption that pension systems make to ensure they have enough funding to pay you the benefits you’ve been promised. To determine the amount of contributions required, a pension fund and its actuaries make educated guesses about how much they think they can earn by investing those contributions. That educated guess is called the assumed rate of return.

The higher the assumed rate of return, the fewer contributions teachers and their employers have to make. The lower the assumed rate of return, the higher contributions need to be in order to pay for the benefits promised.

Assumed rates of return aren’t historic averages. Analysts look at past performance to inform predictions, but the assumed rate of return is their best guess about the future.

Assumed rates of return also do not determine your benefits. Your benefits are based on formulas that take into account years of service and compensation during your working years—usually your final average salary. Pension systems specialists start by estimating the total amount of benefits and then calculate the contribution rate needed to pay them, factoring in an assumed rate of return.

What is the assumed rate of return for your pension plan?

Select or search your state or plan below.

Select State	Select Plan	Your Plan's Assumed Investment Return	return	National Average 2019 Assumed Return for Public Plans	National Average 2019 Assumed Return for Private Pensions	Note
Alabama	Alabama Teachers' Retirement System	7.70%	return	7.2% return	3.1% return
Alaska	Alaska Teachers’ Retirement System	7.38%	return	7.2% return	3.1% return	You have a defined contribution plan. See Module 7 for more details.
Arizona	Arizona State Retirement System	7.50%	return	7.2% return	3.1% return
Arkansas	Arkansas Teacher Retirement System	7.50%	return	7.2% return	3.1% return
California	California Public Employees Retirement Fund	7.38%	return	7.2% return	3.1% return
California	California State Teachers’ Retirement System	7.00%	return	7.2% return	3.1% return
Colorado	Colorado Public Employee Retirement Association - Denver Public Schools Fund		return	7.2% return	3.1% return
Colorado	Colorado Public Employee Retirement Association - Schools Division Fund		return	7.2% return	3.1% return
Connecticut	Connecticut State Teachers’ Retirement System	6.90%	return	7.2% return	3.1% return
District of Columbia	District of Columbia Teachers' Retirement Fund	6.50%	return	7.2% return	3.1% return
Delaware	Delaware State Employees’ Pension Plan	7.00%	return	7.2% return	3.1% return
Florida	Florida Retirement System - Defined Benefit Plan	7.20%	return	7.2% return	3.1% return
Georgia	Georgia Teachers Retirement System	7.25%	return	7.2% return	3.1% return
Hawaii	Employees’ Retirement System of the State of Hawaii	7.00%	return	7.2% return	3.1% return
Idaho	Public Employee Retirement System of Idaho	7.00%	return	7.2% return	3.1% return
Illinois	Illinois State Teachers' Retirement System	7.00%	return	7.2% return	3.1% return
Indiana	Indiana State Teachers Retirement Fund - 1996 Account	6.75%	return	7.2% return	3.1% return
Indiana	Indiana State Teachers Retirement Fund - Pre-1996 Account	6.75%	return	7.2% return	3.1% return
Iowa	Iowa Public Employees' Retirement System	7.00%	return	7.2% return	3.1% return
Kansas	Kansas Public Employees Retirement System - School Employees	7.75%	return	7.2% return	3.1% return	You have a cash balance plan. See Module 7 for more details.
Kentucky	Kentucky Teachers' Retirement System	7.50%	return	7.2% return	3.1% return
Louisiana	Louisiana School Employees' Retirement System	7.06%	return	7.2% return	3.1% return
Louisiana	Louisiana Teachers’ Retirement System	7.65%	return	7.2% return	3.1% return
Maine	Maine Public Employees Retirement System - State Employee and Teacher Program	6.75%	return	7.2% return	3.1% return
Maryland	Maryland State Retirement and Pension System - Teachers' Combined System	7.40%	return	7.2% return	3.1% return
Massachusetts	Massachusetts Teachers’ Retirement System	7.25%	return	7.2% return	3.1% return
Michigan	Michigan Public School Employees’ Retirement System	6.80%	return	7.2% return	3.1% return
Michigan	Michigan Public School Employees’ Retirement System Pension Plus Plan	6.80%	return	7.2% return	3.1% return	Plus Hybrid DC Balance Account
Michigan	Michigan Public School Employees’ Retirement System Pension Plus Plan 2	6.00%	return	7.2% return	3.1% return	Plus Hybrid DC Balance Account
Minnesota	Minnesota Teachers Retirement Association	7.50%	return	7.2% return	3.1% return
Mississippi	Public Employees’ Retirement System of Mississippi	7.75%	return	7.2% return	3.1% return
Missouri	Missouri Public Education Employee Retirement System	7.50%	return	7.2% return	3.1% return
Missouri	Missouri Public School Retirement System	7.50%	return	7.2% return	3.1% return
Montana	Montana Teachers' Retirement System	7.50%	return	7.2% return	3.1% return
Nebraska	Nebraska Public Employees Retirement Systems - School Employees Plan	7.50%	return	7.2% return	3.1% return
Nevada	Public Employees’ Retirement System of Nevada - Regular Subfund	7.50%	return	7.2% return	3.1% return
New Hampshire	New Hampshire Retirement System	7.25%	return	7.2% return	3.1% return
New Jersey	New Jersey Teachers’ Pension & Annuity Fund	7.30%	return	7.2% return	3.1% return
New Mexico	New Mexico Educational Retirement Board	7.25%	return	7.2% return	3.1% return
New York	New York State Teachers’ Retirement System	7.10%	return	7.2% return	3.1% return
North Carolina	North Carolina Teachers' and State Employees' Retirement System	7.00%	return	7.2% return	3.1% return
North Dakota	North Dakota Teachers' Fund for Retirement	7.75%	return	7.2% return	3.1% return
Ohio	Ohio School Employees' Retirement System	7.50%	return	7.2% return	3.1% return
Ohio	Ohio State Teachers' Retirement System	7.45%	return	7.2% return	3.1% return
Oklahoma	Oklahoma Teachers' Retirement System	7.50%	return	7.2% return	3.1% return
Oregon	Oregon Public Employees Retirement System	7.20%	return	7.2% return	3.1% return
Pennsylvania	Pennsylvania Public School Employees’ Retirement System	7.25%	return	7.2% return	3.1% return
Rhode Island	Employees’ Retirement System of Rhode Island - Teachers	7.00%	return	7.2% return	3.1% return
South Carolina	South Carolina Retirement System	7.25%	return	7.2% return	3.1% return
South Dakota	South Dakota Retirement System	6.50%	return	7.2% return	3.1% return
Tennessee	Tennessee Teacher Legacy Pension Plan	7.25%	return	7.2% return	3.1% return
Tennessee	Tennessee Teacher Retirement Plan	7.25%	return	7.2% return	3.1% return	Plus Hybrid DC Balance Account
Texas	Texas Teachers Retirement System	7.25%	return	7.2% return	3.1% return
Utah	Utah Public Employees Contributory Retirement System	6.95%	return	7.2% return	3.1% return
Utah	Utah Tier 2 Public Employees Contributory Retirement System	6.95%	return	7.2% return	3.1% return
Utah	Utah Public Employees Noncontributory Retirement System	6.95%	return	7.2% return	3.1% return
Vermont	Vermont State Teachers' Retirement System	7.50%	return	7.2% return	3.1% return
Virginia	Virginia Retirement System - Teachers Division	6.75%	return	7.2% return	3.1% return
Washington	Washington School Employees' Retirement System - Plan 2/3	7.50%	return	7.2% return	3.1% return
Washington	Washington Teachers Retirement System Plan 1	7.50%	return	7.2% return	3.1% return
Washington	Washington Teachers Retirement System Plan 2 & 3	7.50%	return	7.2% return	3.1% return
West Virginia	West Virginia Teachers’ Retirement System	7.50%	return	7.2% return	3.1% return
Wisconsin	Wisconsin Retirement System		return	7.2% return	3.1% return
Wyoming	Wyoming Retirement System	7.00%	return	7.2% return	3.1% return
Select State	Select Plan	Your Plan's Assumed Investment Return	return	National Average 2019 Assumed Return for Public Plans	National Average 2019 Assumed Return for Private Pensions	Note

Note: This is the rate of return in your retirement system’s most recent annual financial report. Some states report on a one or two year lag.

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Assumed Rate of Return

What is the assumed rate of return for your pension plan?

Note: This is the rate of return in your retirement system’s most recent annual financial report. Some states report on a one or two year lag.

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