Are public pension funds betting on unrealistic returns?

The New York Times had a great piece yesterday about public pension funds counting on interest rates that many experts think are unrealistic in today's economy.

From the story:

While Americans are typically earning less than 1 percent interest on their savings accounts and watching their 401(k) balances yo-yo along with the stock market, most public pension funds are still betting they will earn annual returns of 7 to 8 percent over the long haul, a practice that Mayor Michael R. Bloomberg recently called “indefensible.”

For the full report, click here. And for the record, the Philly municipal pension fund is banking on a return of 8.1 percent. Last fall, Finance Director Rob Dubow told us that that expected return was not unrealistic, given the fund's long term performance.