State and local government retirement systems successfully navigated the global financial crisis from 2007 to 2009 and were able to attain pre-recession asset levels within about six years, a new report says.

The research by the National Institute on Retirement Security (NIRS) also found that these pension plans adopted strategies in reaction to the Great Recession that allowed them to ensure long-term resilience.

"No investor was immune from the devastating effects of the Great Recession, including public pension plans," NIRS Executive Director Dan Doonan, one of the authors of the report, said in a prepared statement. "But despite the global turmoil, pension plans didn't miss a beat delivering promised retirement income to retirees. In fact, more than $3.8 trillion in benefits have been paid since 2007."

The report noted that public pension plans across the nation suffered significant losses as a result of the Great Recession, which lasted from 2008 to 2009. It took years for pension plans to recover and, as a result of the financial shock, many of them took on a more conservative approach, mainly by lowering their assumed rates of return, improving mortality assumptions and shortening their amortization periods.

Researchers found that the median government pension plan took until 2013 to recover its fiscal 2007 asset levels, while the majority of plans were able to achieve this type of recovery by 2014.

NIRS also reported that, as of the end of last year, pension plan assets were 88% above 2007 levels and $3.8 trillion had been paid out in benefits since the Great Recession. There were also $89 billion in plan withdrawals over that period of time.

Beyond the recovery of assets, researchers said a key development since the Great Recession has been the way pension plans carry out their business.

"The real story is a consistent trend among public plans to adopt more conservative assumptions for future investment returns and longevity," the report said.

From 2001 to 2010, the median government pension plan assumed an annual rate of return of 8%. Over time, however, as quantitative easing by the Federal Reserve drove down bond yields, the median plan return expectation dropped to 7% as of this year, the report said.

Changes in the market also led to a shift in investment priorities.

"Since the Great Recession, public plans have reduced their exposure to fixed income and to a lesser degree to fixed-income assets while increasing their holdings of real estate, hedge funds and private equity," the report said.

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