Funded ratios of public pension plans the ratio of assets to actuarial accrued liability rose on average to 95.8% in 1998 from 87.2% in 1996, according to a new survey by the Public Pension Coordinating Council.
The survey found the compound average annualized rate of return on public fund investments for the five years ended Dec. 31, 1998, was 14.48%, up from 13.37% for the five years ended Dec. 31, 1996.
Public funds shifted assets more toward equities. As of Dec. 31, 1998, the average public fund had 48.1% in domestic equities; 28.2% in domestic fixed income; 4.1% in real estate, including equity real estate and mortgages; and 14.3% in combined international equities and fixed income. In 1996, the public funds had 45.3%, 30.8%, 4.6% and 13.4%, respectively, in those asset classes.
The survey represents 246 public employee retirement systems, including 371 pension plans, and 77% of the $2.3 trillion in public fund assets.