Statewide public pension funds received an average 87.2% of their actuarially determined contributions on a dollar-weighted basis in fiscal year 2014, up from 81.1% the previous year, said a study released Wednesday by the National Association of State Retirement Administrators.
On a non-dollar-weighted basis, the pension funds received an average of 93% of their ADC in 2014.
In the median, states received 100% of their actuarially determined contribution in fiscal year 2014, compared to 99% in fiscal 2013.
The $8.3 billion Oklahoma Public Employees Retirement System, Oklahoma City, received the highest percentage of its ADC at 174.6%; by comparison, the $26 billion New Jersey Teachers’ Pension and Annuity Fund, Trenton, received only 18.2%.
Required contributions reached an aggregate $98.2 billion in fiscal year 2014, up 4.3% from 2013.
NASRA also took a 14-year look at contributions from fiscal years 2001 to 2014, finding that required contributions grew by $70.4 billion over the period. Actual contributions paid by employers grew by $57.5 billion over the period, totaling $85.6 billion in fiscal year 2014.
The 4.3% annual increase in 2014 in required contributions marked the smallest annual increase between 2001 and 2014, which NASRA attributed to strong investment returns following the 2008-2009 financial crisis, pension reform, increased employee contributions and reduced benefit costs in nearly every state since 2010.
The median ADC over the 2001-2014 time period was 95.9%; the weighted average, 84.6%; and the non-weighted average, 89%.
“Fiscal year 2014 marks the highest contribution experience since the market decline of 2008-2009 increased unfunded pension liabilities and the economic recession diminished state and local fiscal conditions,” NASRA researchers said in the study.
The plans received an average 101% of their ADC on a weighted basis in fiscal year 2001, which dropped to 80.6% in 2010 and a low of 78.7% in 2012, eventually rising to 87.2% in 2014, according to the study.
State and local governments are continuing to attempt to recover from the 2007-2008 recession, which “decimated state and local finances” and the market decline of 2008-2009, which increased unfunded liabilities and liability costs, said Keith Brainard, NASRA’s research director, in a telephone interview. “Overall improving efforts” by states to “properly fund pensions is encouraging,” Mr. Brainard said.
NASRA researchers analyzed contributions to 112 state-administered public pension funds, including the District of Columbia.