We recently published projections by Professors Robert Novy-Marx and Joshua Rauh that showed dozens of city pension plans running dry in the next few years.
The claim that Jacksonville’s fund would become insolvent by 2020 drew a response from Jacksonville Police & Fire Pension Fund Director John Keane.
Keane objects to the assumption of a 4% return on investment. Instead, Keane assumes an 8% return, which would allow the fund to remain solvent through tax amortization. Depending on which rate you use, Jacksonville’s unfunded liability is $4 billion or $1.5 billion.
Here’s Keane’s letter:
Recent Unfunded Pension Liability Study Based on Unduly Conservative Assumptions
By John Keane, Executive Director – Administrator
And Richard Cohee, Deputy Executive Director – Assistant Administrator
