The overall estimated funding ratio of the 100 largest U.S. public pension plans declined for the second month in a row in September due to negative market performance, according to the Milliman 100 Public Pension Funding index.
The estimated ratio fell to 73.2% as of Sept. 30 from 75.3% a month earlier, driven by an estimated aggregate investment return of -2.6% during the period, with an estimated range of -4.2% to -1.6%.
During August, Milliman had estimated the funding ratio fell from 76.8% due to an estimated aggregate investment return of -1.6% for the month ended Aug. 31.
"With this performance, another plan fell below the 90% funded mark, so that only 16 plans stood above that benchmark at the end of September," said Rebecca Sielman, principal and consulting actuary at Milliman and author of the Milliman 100 Public Pension Funding index, in an Oct. 17 news release.
"At the other end of the spectrum, another two plans — for a total of 25 — were less than 60% funded at month's end," she said.
Also as of Sept. 30, a total of 18 plans had ratios between 60% and 70% (the same as Aug. 31), 23 plans were between 70% and 80% (up from 21), and 18 plans were between 80% and 90% (down from 21).
As a result of the negative investment returns during September, estimated assets dropped to $4.45 trillion from $4.59 trillion a month earlier, while liabilities grew to an estimated $6.11 trillion from $6.10 trillion.
