Kalamazoo, Michigan, is a good example of a fiscally distressed local government with a pension plan that remains more than 100 percent funded. How did they do it? For one thing, pension contributions have continued even when the plan reached full funding. That has allowed the city to weather investment losses by drawing on what is, in effect, a pension reserve. Kalamazoo’s investment objective is to achieve a “real rate of return (nominal rate less inflation) of 5 percent over time. This objective has been achieved since 1982.” icma.org/kalamazoo_retirement_system
Posted on: Thu, 16 Jan 2014 17:04:16 +0000
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