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….

[snip]

In New York, the city’s chief actuary, Robert North, has proposed lowering the assumed rate of return for the city’s five pension funds to 7 percent from 8 percent…. But that change would mean finding an additional $1.9 billion for the pension system every year….

…to many observers, even 7 percent is too high in today’s market conditions.

“The actuary is supposedly going to lower the assumed reinvestment rate from an absolutely hysterical, laughable 8 percent to a totally indefensible 7 or 7.5 percent,” Mr. Bloomberg said during a trip to Albany in late February. “If I can give you one piece of financial advice: If somebody offers you a guaranteed 7 percent on your money for the rest of your life, you take it and just make sure the guy’s name is not Madoff.”

4 is not 2.

35 is not 2.

Also, and by the same token, 8 is not 7.

The typical public pension plan assumes its investments will earn average annual returns of 8 percent over the long termm…. Actual experience since 2000 has been much less, 5.7 percent over the last 10 years….
Public Pensions Faulted for Bets on Rosy Returns
By MARY WILLIAMS WALSH and DANNY HAKIM
Published: May 27, 2012

8 is not 5.7, either.