Business in brief: Public pensions improve as equities soar – Business –

The fuse on the public pension time bomb got a little longer.

Record-breaking equity markets boosted U.S. state and local-government pension investments the most in three years in fiscal 2017, easing pressure on governments that have to put more money into plans when investment returns fall short of expectations.

Public pensions booked a median gain of 12.4 percent for the fiscal year ended in June and have returned an annualized 20-year median return of 7 percent, according to the Wilshire Trust Universe Comparison Service.

“Diversification pays and stay the course,” said Robert Waid, a managing director at Wilshire Associates Inc. in Santa Monica, California. “We had a couple really bad years and now long-term returns are coming back into view.”

The gains may help ease the fiscal strain on state and local governments that have nearly $2 trillion less then they need to cover all the benefits that have been promised.

Because they expect investment gains of more than 7 percent each year, when their returns fall short, governments need to pay more into the funds.

McDonald’s plans expansion in China

McDonald’s will nearly double the number of restaurants in China in the next five years, eventually surpassing Japan as the hamburger chain’s second-biggest market outside the U.S.

The company, based in Oak Brook, Illinois, just outside of Chicago, expects to have 4,500 restaurants in China by 2022, up from 2,500. With fewer people eating at U.S. locations, it hopes to grow sales in China by double digits in each of the next five years.


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