Public pension funding reaches 2-year high — Milliman

The overall estimated funding ratio of the 100 largest U.S. public pension plans improved to 79.7% at the end of March, a two-year high, according to the Milliman 100 Public Pension Funding index.

The increase in the funding ratio from the estimate of 78.6% at the end of February was primarily the result of a second straight month of strong market performance. At the end of January, Milliman’s estimated funding ratio was 77.7%.

The March funding ratio is the highest estimate by Milliman since March 2022, when the ratio was 82.7%.

According to Milliman, the aggregate estimated investment return for March was 1.7%, with estimated returns ranging from 0.9% to 2.6% for the month.

“March’s market improvement pushed an additional four plans above the 90% funded mark, so 25 total plans now stand above this key benchmark,” said Rebecca Sielman, principal and consulting actuary at Milliman and author of the Milliman 100 Public Pension Funding index, in an April 19 news release. “At the other end of the spectrum, 15 plans remain below 60% funded, the same number as last month.”

Also as of March 31, a total of 16 pension plans had funding ratios between 60% and 70% (the same as at the end of February), 18 plans were between 70% and 80% (down from 22), and 26 plans were between 80% and 90% (the same as February).

Estimated assets increased to $4.98 trillion as of March 31 from $4.907 trillion a month earlier, while liabilities grew to an estimated $6.25 trillion from $6.24 trillion.