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GAO: Public pensions assume a lot

The difference in projecting liabilities between the assumed-return and bond-based approach can be huge.

By Nick Thornton | Updated on October 31, 2014

Canada, the U.K. and the Netherlands, all countries dependent on defined benefit retirement plans, assume rates of returns on plan investments that are far less generous than the 7.5 to 8 percent U.S. public pension plans tend to expect.

That’s the lead observation offered in a new report from the Government Accountability Office, based on its review of how public pension plans assess and report their future liabilities. It conducted the review at the request of retiring Sen. Tom Harkin, D-Iowa.

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Nick Thornton

Nick Thornton

Nick Thornton is a financial writer covering retirement and health care issues for BenefitsPRO and ALM Media. He greatly enjoys learning from the vast minds in the legal, academic, advisory and money management communities when covering the retirement space. He's also written on international marketing trends, financial institution risk management, defense and energy issues, the restaurant industry in New York City, surfing, cigars, rum, travel, and fishing. When not writing, he's pushing into some land or water.

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