State pension plans' funding slips to 73% in 2012
By Rick Baert | March 4, 2013 12:31 pm
The funded status of 134 state defined benefit plans studied by Wilshire Consulting fell to 73% in fiscal year 2012, from 77% the previous year.
Stock market volatility in the 12 months ended June 30 caused the decline, Russ Walker, Wilshire vice president and an author of the report, said in a news release.
“Unfortunately, growth in fund assets could not keep pace with growth in plan liabilities over fiscal 2012,” he said.
Among 109 state retirement systems that reported actuarial data on or after June 30, pension assets declined 1.2% to $1.826 trillion and liabilities grew 4.8% to $2.66 trillion, for a funding ratio of 69%. Those plans had a funding ratio of 73% a year earlier.
The aggregate shortfall of those plans was $834 billion, up 21% from a year earlier.
In the release, Mr. Walker said 95% of the 109 plans have liabilities greater than assets.
The “Wilshire 2013 Report on State Retirement Systems: Funding Levels and Asset Allocation” also includes data from 25 state pension funds that last reported actuarial data prior to June 30.
Among all 134 plans studied, the average equity allocation, including real estate and private equity, was 64.8%, while the remainder was in fixed income and other non-equity assets. Twenty-one plans had equity allocations of at least 75%, and 12 systems had less than 50% in equities.