U.S. state pension plans' estimated aggregate funding ratio reached 78.6% as of Dec. 31, over 6 percentage points higher than a quarter earlier, according to a Wilshire Associates report.
The report attributed the estimated ratio's increase from 72.3% as of Sept. 30 to a 9.5% increase in asset values partially offset by a liability value increase of 0.8%.
The aggregate funding ratio as of Dec. 31 also represented an overall 3.8 percentage-point increase from the ratio of 74.8% a year earlier, the report said.
"A third consecutive quarterly increase in asset values of 9.5%, following the 11.8% and 5.1% increases in the second and third quarters, respectively, more than fully reversed the funded ratio decline during the first quarter and resulted in an estimated funded ratio increase of nearly 4 percentage points over calendar year 2020," said Ned McGuire, managing director at Wilshire Associates, in a news release announcing the results of the report.
The assumed asset allocation of Wilshire's 2020 state funding study is 29% domestic equities, 22% core fixed income, 18% international equities, 15% real assets, 10% private equity and 6% high yield bonds.
