Wilshire: City and county pension funding ratios climb to 73% in 2013

The aggregate funding ratio of U.S. city and county pension plans rose to 73% in fiscal year 2013, up from 69% in 2012, said a report from Wilshire Consulting.

Wilshire's report contains data from 109 city and county retirement systems. Of the 109 pension funds, 105 reported actuarial data on or after June 30, 2013, and four reported data before that date.

The funding increase in 2013 was primarily driven by strong global equity markets, the report said.

For the 105 pension funds that reported actuarial data on or after June 30, 2013, assets rose to $428.9 billion, up 10.9% from 2012.

Meanwhile, liabilities increased to $589.7 billion, up 4.6% from 2012.

The city and county pension funds studied by Wilshire had an average asset allocation of 32.3% domestic equity, 23.6% domestic fixed income, 19% non-U.S. equity, 12% other, 6.6% real estate, 4.5% private equity and 2% non-U.S. fixed income.

“Global stock markets have had a very good run for several years now, with an occasional hiccup,” said Russ Walker, vice president at Wilshire Associates and an author of the report, in a telephone interview. Global equity performance “has helped pension plans in general,” Mr. Walker said.

However, the impact of global equity performance on pension plans' funding ratios has been dampened by the current interest rate environment, Mr. Walker said. There has not been “a dramatic increase in funded status” because of low interest rates, he said.

Wilshire Consulting is the institutional investment consulting and outsourced CIO unit of Wilshire Associates.