The overall estimated funding ratio of the 100 largest U.S. public pension plans rose in August thanks to a fourth straight month of positive investment returns, according to the Milliman 100 Public Pension Funding index.
The increase in the funding ratio to 82% as of Aug. 31 from the estimate of 80.8% as of July 31 was primarily the result of positive market performance in August.
The aggregate estimated investment return for August was 1.5%, with estimated returns ranging from 0.8% to 2.5% for the month.
It was the fourth straight month of positive investment returns. Before the streak began, the estimated funding ratio at the end of April had been 77.6%.
“Another strong market performance in August lifted the PPFI plans’ funding levels to 82%, approaching the PPFI high-water mark of 85.5% reached in December 2021,” said Rebecca Sielman, principal and consulting actuary at Milliman and author of the Milliman 100 Public Pension Funding index, in a Sept. 20 news release. “This growth pushed an additional two plans over the 90% funding level in August, leaving 29 plans above this benchmark and only 15 plans less than 60% funded.”
At the end of July, there had been 27 plans with funding ratios of above 90%, and 15 plans with ratios below 60%.
Also as of Aug. 31, a total of 10 pension plans had funding ratios between 60% and 70% (down from 12 as of July 31), 20 plans were between 70% and 80% (down from 21 ), and 26 plans were between 80% and 90% (up from 25).
