Are Public Pension Funds Making Unrealistic Assumptions on Asset Returns?

American Enterprise economist Andrew Biggs again warned about public pension funding in a Wall Street Journal piece. He’s not altogether wrong. Biggs points out that many states continue to badly underfund their pensions. He also cautions against pension funds taking too much risk with their investments. These points are well taken, but I would raise a few issues about Bigg’s argument.

First, it’s good to see that Kansas is Bigg’s poster child as one of the states with a poorly funded pension...