Not only that but the pension fund administrators have used estimated 8% + returns for planning purposes and they haven’t even come close to getting those returns for the last 10 years. Also, the management expenses have skyrocketed along with the level of corruption.
Eight percent is achievable in a low fee highly diversified balanced fund (2/3 stocks, 1/3 bonds). The Vanguard Wellington Fund has been in existence since 1929. Its average annual return since 1929 has been 8.29%. Its average return over the past 10 years , which includes the 2008 recession, is 8.38%. Its average annual return over the past 5 years is 11.98%, three years 13.75%, and one year 11.94%.
Had California simply put its pension money in Wellington ten years ago, the fund would be solvent and it could have saved the cost of an entire bureaucracy. Fire the administrators today and let a private sector firm with decades of proven performance manage the money.