Milliman reports a record high funded ratio for public pensions
Milliman's latest Public Pension Funding Index (PPFI) findings reveal that the funded ratio of the United States' 100 largest public defined benefit plans rose to 78.6 percent in February 2024, marking the highest level recorded since May 2022.
In this leap-year February, the Milliman 100 PPFI funded ratio saw an increase from 77.7 percent at January's end to 78.6 percent by February 29.
This uplift came after a period of static investment performance in the preceding month, with the PPFI plans collectively posting an estimated return of 1.7 percent for February.
The performance of individual plans varied significantly, with estimated returns ranging from 0 percent to 3.2 percent for the month.
The plans together amassed approximately $79bn in total market value, despite encountering a net negative cash flow of around $9bn. Additionally, the discrepancy between the plans' assets and liabilities diminished by $56bn, concluding at $1.333tn as of February 29.
Becky Sielman, the co-author of Milliman’s PPFI, provided insights into the index's latest results.
She remarked, “Although most plans saw an improvement in their funded status, this month’s above-average market performance did not move any plans across either the 60 percent or 90 percent funded ratio mark.”
Sielman further detailed the static nature of the plans' funded statuses at the end of February, stating, “As a result, by the end of February we’re holding on to the gains we saw in Q4 of last year, with 21 plans above 90 percent funded, and 15 plans below 60 percent funded.”
