U.S. state pension plans' aggregate funding ratios fell in the third quarter to the lowest level since the end of 2022, according to Wilshire Advisors estimates.
For the quarter ended Sept. 30, the estimated ratio dropped by 3 percentage points from three months earlier to 75.2%, the result of an estimated 3% decrease in asset values exacerbated by an estimated 0.8% increase in liability values.
It is the lowest estimated ratio since Dec. 31, when Wilshire estimated an aggregate funding ratio of 73.6%. The September level is down from a peak of 79.9% as of July 31.
Ned McGuire, managing director at Wilshire Advisors, said in an Oct. 23 news release that nearly all asset classes experienced negative returns for the third quarter, leading to the drop in asset value.
Wilshire's assumed asset allocation of U.S. state pension plans is 31% domestic equities, 23% core fixed income, 15% real assets, 14% international equities, 13% private equity and 4% high-yield bonds.