Originally Posted by Dennis in MA
Pension funds don't invest in risk-free investments. They have a "prudent man" diversified portfolio. 7% long-term (30 years) is NOT unreasonable.
7% for 30 years is not unreasonable--to fund benefits which are not inflation adjusted and are based on this year's salary.
But every pension system I've seen bases your pension on the last few years' salary--i.e., the highest possible ones--and gives increases in benefits for inflation.
7% is not unreasonable--but 7% above inflation is.