usMassachusetts Treasurer Steven Grossman wants to reduce the assumed rate of return on the state’s $50 billion in pension-fund assets, currently at 8.25 percent and among the highest for U.S. public retirement plans.

Grossman said he’s gathering legislative support for a cut to 8 percent, with an option to go lower. That would put Massachusetts more in line with other states, yet the move would cost taxpayers and covered workers $1.7 billion to maintain funding commitments.

More than a third of 126 state and municipal pensions, including the California Public Employees’ Retirement System, the largest with $238.5 billion in assets, have cut investment assumptions since 2008 as returns have lagged behind historical averages, according to the Public Fund Survey. Wilshire Associates said this week that the median return for public systems was 1.15 percent for fiscal 2012 as the European debt crisis and a slowing global economy curbed equity gains.

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