The overall estimated funding ratio of the 100 largest U.S. public pension plans improved to 74.5% as of March 31 from 73.6% a month earlier, according to the Milliman 100 Public Pension Funding index.
During the month of March, Milliman estimated that public pension plans had an aggregate investment return of 1.8%, with an estimated range of 0.7% to 2.8%.
While February was a down month, strong returns in January contributed to an overall increase in the estimated funding ratio during the first quarter from the year-end ratio of 72.6% at the end of 2022.
"Although March was a volatile month in the financial markets with another Fed (Federal Reserve) rate hike and turmoil in the banking industry, investment performance for the country's largest public pension plans was modestly positive for the period," said Rebecca A. Sielman, principal and consulting actuary at Milliman and author of the Milliman 100 Public Pension Funding index, in a news release Monday. "Yet despite this positive news, 24 plans remain less than 60% funded, while only 17 are more than 90% funded, the same results we saw in February."
Also as of March 31, a total of 18 plans had ratios between 60% and 70% (down from 20 as of Feb. 28), 21 plans were between 70% and 80% (down from 22) and 20 plans were between 80% and 90% (up from 17).
As a result of the positive returns for the month ended March 31, estimated assets rose to $4.492 trillion from $4.423 trillion a month earlier, while estimated liabilities rose slightly to an estimated $6.026 trillion from $6.011 trillion.