Public retirement systems saw their expenses rise in fiscal 2022, while many reduced their assumed rates of return, according to an annual study by the National Conference on Public Employee Retirement Systems.

In fiscal 2022, the pension systems averaged 64 basis points in administrative costs and investment manager fees, up from 54 points the year before.

Systems lowered their assumed rates of returns to an average 6.86%, from 7.07% a year earlier. Among all respondents, 60% said they lowered those rates of return during the year, below the 70% that had lowered their assumed rates of return in fiscal 2021.

NCPERS also said in the study that 34% of respondents raised their benefit age and service requirements, down from 40% the year before, and 28% increased employee contributions, down from 37%.

Many responding funds did not offer a cost-of-living adjustment in the most recent fiscal year, and the average adjustment was 2%, above the average adjustment of 1.7% the previous fiscal year.

NCPERS is the largest trade association for public-sector pension funds, representing more than 500 funds throughout the U.S. and Canada with more than $5 trillion in pension assets collectively.

Of the 195 state and local pension systems that responded to a survey between September and December on which the annual study is based, 56% were local systems and the rest were state systems, with a combined 19.6 million participants and more than $3 trillion in assets.

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