MYTH: MERS is reducing the assumed investment return again because the 7.75% investment return assumption set following the last Experience Study was too high.
FACT: Retirement plans operate over long-term time horizons, and over the long-term, MERS has met the 7.75% assumption that was set during the last Experience Study. In today's ever-changing world, however, there is a need to review economic assumptions more frequently so that plans can make incremental changes. As a result, MERS pulled up the review of our forward-looking economic assumptions to help ensure MERS plans are continuing to adequately fund benefits. Because expected investment returns are likely to be materially lower than the past due to historically low interest rates and high equity market valuations, MERS will be reducing our investment assumption from 7.75% to 7.35%.