The board of the California State Teachers' Retirement System is lowering its assumptions for investment returns after conducting a multiyear study with Milliman, its actuarial consultant.

The last time the pension changed its annual return assumptions was in 2012, when it lowered the projected return to 7.50% from 7.75% per year.

The odds of that return assumption being met over the long term are less than 50%, the board noted.

The lowered assumptions will go into effect over a two-year period. The first phase, which lowers the investment return expectation to annual returns of 7.25% from 7.50%, is for the June 30, 2016, actuarial valuation and will be presented at the April 2017 board meeting. The second phase, which lowers the return projection to 7.00% from 7.25%, is for the June 20, 2017, valuation and will be presented at the April/May 2018 board meeting.

The pension fund also adopted a revised mortality methodology that reflects new life expectancy data. Early career members of the retirement system are expected to live two-to-three years longer than those who retire today, according to the board.

The board also revised its economic assumptions, dropping its wage growth expectations to 3.50% from 3.75% and inflation growth expectations to 2.75% from 3.00%.