Milliman: Largest public pension plans' funding ratio rises for year ended June 30

The aggregate funded status of the 100 largest U.S. public pension funds rose to an estimated 70.7% as of June 30, up from 67.7% the previous year, said Milliman's most recent quarterly public pension funding study released Tuesday.

Boosted by strong market performance in late 2016 and early 2017, asset values rose an estimated 7.8% over the year to $3.44 trillion as of June 30, which outpaced an estimated 3.2% increase in liabilities to $4.87 trillion. The median annualized return on assets over the 12 months ended June 30 was 11.5%.

Of the 100 plans analyzed, nine had funding ratios above 90%, 59 were between 60% and 90%, and 32 were below 60%.

The report also found that 33 of the 100 largest plans lowered their return assumptions during the most recent fiscal year, with 66 of the 100 plans lowering them at least once since Milliman's first public pension funding study in 2012.

Additionally, the report found that the ratio of inactive/retired workers to active workers continues to climb. There were 13.6 million retired/inactive workers and 12.5 million active workers in 2017, compared to 12.6 million inactive/retired workers and 12.4 million active workers in 2016.

The estimates in Tuesday's report are based on more up-to-date information than Milliman had available in its second-quarter report released in August, which also estimated the funded status as of June 30. That estimate was 73%.