The funding status of city and county pension systems worsened to 83% last year from 84% in 2002, as liabilities rose more quickly than assets, according to a new report from Wilshire Associates. Assets of the 63 city and county retirement systems that provided Wilshire with data for 2003 rose $8.4 billion to $148.6 billion from $140.2 billion, while liabilities increased $11.8 billion to $179.2 billion from $167.4 billion.
Wilshire estimated that unfunded liabilities for the systems could increase by $3 billion a year, based on the firm's annual asset returns estimate of 7% vs. the 7.9% average annual return assumption of city and county pension plans.
City and county pension portfolios have a 65% average allocation to equities, including real estate and private equity, and a 35% average allocation to fixed income, according to Wilshire.
