Investment returns and confidence levels among public pension plan administrators have increased, while administrative costs and fees and average funding levels have dipped, according to a new survey by the National Conference on Public Employee Retirement Systems.
The 2013 NCPERS Public Retirement System Study found that on a 10-point scale, with 10 being the highest, public pension plan administrators' overall confidence rating rose to 7.8, up slightly from 7.7 in 2012.
Annualized returns on three-year investments rose to 10% from 4% in 2012, while 10-year annualized investment returns rose to 7% from 5%; 20-year annualized returns remained at 8%.
According to the survey, the overall average expense for administration and investment manager fees decreased significantly, to 57.3 basis points from the 2012 level of 73.1 basis points.
“Our annual survey provides convincing evidence that the vast majority of public pension plans are financially sound, well-funded and sustainable for the long term,” NCPERS Executive Director and Counsel Hank Kim said in a news releaseaccompanying the study. “It also demonstrates that defined benefit public pension plans are the least costly way to ensure retirement security for American workers.”