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Largest public pension funds see funding improvements in first quarter — report

The aggregate funded status of the 100 largest public pension funds rose to 72% as of March 31, up from 70.1% as of Dec. 31, as asset growth outpaced liabilities, said Milliman's quarterly public pension funding study released Wednesday.

Assets rose 3.6% to an estimated $3.383 trillion in the three months ended March 31, the result of a 4.29% aggregate investment return. Liabilities, meanwhile, rose 0.8% to an estimated $4.698 trillion as interest on liabilities and new benefit accruals outpaced benefits paid to retirees.

“Thanks to robust market performance in Q1, the funded ratios for our Milliman 100 plans improved across the board, with five additional pensions crossing the 90% funded mark,” said Rebecca A. Sielman, principal and consulting actuary at Milliman and author of the study, in a news release. “And while quarterly investment returns dwarfed those of Q4, the wide range in performance — from a low of 2.12% to a high of 5.06% — highlights the challenge that lies ahead for many poorly funded plans.” Returns were 0.45% in aggregate in the fourth quarter and ranged from -3.92% to 1.79%.

Of the 100 plans analyzed, 15 had funding ratios above 90%, 64 between 60% and 90%, and 21 below 60%. As of Dec. 31, 10 plans had funding ratios above 90%, 65 between 60% and 90%, and 25 below 60%.