(The Center Square) — The Washington state pension investment fund continues to perform above assumed returns, though pension analysts and the Washington State Investment Board urge caution into reading too much into those results.
“It’s important to note that one-year performance figures can fluctuate significantly based on a variety of factors,” Institutional Relations Director James Aber wrote in an email to The Center Square. “As a pension fund with a long investment horizon, the WSIB is focused on generating strong long-term returns.”
The assumed annual rate of return for the pension investments is 7.25%, which was increased from 7% by the state Legislature last year. The assumed rate of return is used to determine state and employee contributions to the pension plans, which are considered some of the best funded among state pension systems.
According to the latest meeting of the Pension Funding Council, last year’s return was 9.6%. The year-high market valuation has grown from $137 billion in 2021 to $166 billion in 2025.
Despite caution, Aber noted that “over the past 20 years, the WSIB’s CTF has consistently outperformed both its benchmarks and rate of return assumptions and is ranked among the top performing pension funds in the country over the 10- and 20-year time periods.”
Washington Policy Center Director of Budget and Tax Policy Ryan Frost told The Center Square that the higher-than-expected returns “is not all that surprising, considering how the market is performing. I wouldn’t say that’s a surprising number.”
“I think every pension plan across the country should have good returns this year,” he added. “It’s really about what the long term looks like.”
While Aber points to the WSIB’s investment yields over the past two decades, Frost said that Washington’s 7.25% assumed rate is still “too high.”
Frost has previously told The Center Square that if the assumed rate of return isn’t met in the long-term, it could create a pension shortfall, potentially causing taxpayers to fill that gap via increased state contributions to the plans.