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Public Pensions Adopt Cost Sharing Mechanisms to Stem Volatility

  • Maine and South Dakota pensions tweak cost of living increases
  • About a third of states have funds sharing risk with workers

In spring 2016, Sandy Matheson, the executive director of the Maine Public Employees Retirement System, was panicking.

After earning 2 percent the previous fiscal year, record low bond yields and global stock market turmoil were dragging the pension’s returns even lower -- and further away from its 6.9 percent assumed annual return.