It states in the article, that for fiscal 2011 the combined rate of return for the 100 public companies in the Defined Benefit study referred to by Mr. Shelton, the rate of return was 5.9 %. Why wouldn't a more reasonable rate of return of 6 %/ 6.5 % be used rather than the projected 7.8 %/ 7.5 %? Based on the higher 7.5 % projection, isn't the Warwick Fire & Police I plan likely to be unfunded because the Plan isn't acheiving the desired/projected return?
I would like Mr. Shelton to answer, "Why isn't Warwick's projected return rate closer to 5.9 % rather than using a 7.5 % rate?If those individual companies' plans are unfunded further, it's not the taxpayers who will have make up the shortfall.
One may also anticipate the State of RI plan to have a larger unfunded pension(or at least one possible reason)balance if it doesn't acheive its desired/projected rate of return(7.5 %).
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