As states act out the National Pension Scandal, Virginia’s on stage but trying to stay out of the spotlight.

Seven states are on track for their pension funds to run dry by 2020. But while Virginia’s not in deep water like Illinois and New Jersey, the state is still wading in problems.

The recession has cost Virginia 21 percent of its portfolio over the past few years. Sixty percent more employees are retiring now than did last year. Virginia has to pay back the $620 million that legislators withheld from the fund this year in order to balance the budget. And the stock market is still shaky.

At least Virginia Retirement System officials are now realizing they allow too much risk and are making changes. Yesterday, the board of trustees voted to:

- Assume a lower rate of return on investments, dropping expectations from 7.5 percent to 7 percent.

- Invest in less risk and more stability, expanding bond investments from 30 percent to 40 percent and reducing equities from 70 to 60 percent.

Is the VRS pulling back enough?

Perhaps not, if you compare expectations to those made for private-sector plans. Assumed rates of return for private plans are regulated federally, meaning corporate investors are prohibited from assuming rates of return higher than the going rate for corporate bonds.

Recently, that rate has equaled 6.5 percent — meaning that’s the riskiest assumption permitted. At the same time, the VRS was still assuming 7.5 percent.

It’s time for the VRS to stop taking liberties unheard-of in the private sector.

This blog was also published by the Washington Post.