The funding ratio for the largest public pension plans in the U.S. dropped to 66% from 74.9% over the course of the first quarter, according to Milliman. This represents the largest quarterly drop in the history of the firm's Public Pension Funding index.
Market volatility from the coronavirus pandemic resulted in a $419 billion loss in the market value of assets for these pension funds, which in aggregate had investment returns of -10.8% in the first quarter.
Only four plans were at least 90% funded as of March 31, down from 20 as of Dec. 31. Meanwhile, nine plans fell below the 60% funded mark, bringing the total number of plans with a funding ratio below 60% to 35, up from 26 as of Dec. 31.
The total pension liability rose to an estimated $5.355 trillion at the end of the first quarter, up from $5.313 trillion at the end of the previous quarter.