The aggregate funded status of the 100 largest U.S. public pension plans dropped to an estimated 71.4% as of March 31, down from 73.1% at the end of 2017, said Milliman's most recent quarterly public pension funding study, released Tuesday.
Asset values dropped an estimated 1.7% during the quarter to $3.56 trillion as of March 31, while liabilities increased 0.8% to $4.99 trillion. In aggregate, these plans saw quarterly investment returns of -0.75%, down from 3.24% during the fourth quarter of 2017.
The first quarter's investment returns caused six public pension funds to drop below the 90% funded mark, bringing the total number of plans with funding ratios of higher than 90% to 15. Of the remaining plans analyzed, 59 had funding ratios between 60% and 90%, and 26 were below 60%.
"After more than a year of running smoothly, the market stubbed its toe in Q1," Rebecca A. Sielman, principal, consulting actuary and author of the study, said in a news release about the results. "As a result, much of last year's robust pension funding gains were washed away in early 2018."
The report also found that the plans lost investment market value of about $27 billion on top of $28 billion in outflows as benefits paid out exceeded contributions coming in from employers and plan members.