The aggregate funded ratio for US state pension plans decreased by an estimated 12.2 percentage points during the first quarter of 2020 ending the quarter at 62.6 per cent, according to Wilshire Consulting.
The aggregate funded ratio for US state pension plans decreased by an estimated 12.2 percentage points during the first quarter of 2020 ending the quarter at 62.6 per cent, according to Wilshire Consulting.
Wilshire Consulting, the institutional investment advisory and outsourced-CIO business unit of Wilshire Associates Incorporated, assists in ensuring retirements for millions of Americans including those participating in some of the largest corporate and public retirement plans in US.
The quarterly change in funding resulted from a 15.7 per cent decrease in asset values and a 0.7 per cent increase in liability values. The aggregate funded ratio is estimated to have decreased 12.2 percentage points calendar year-to-date and 9.3 percentage points for the trailing twelve months.
“The first quarter’s decrease in funded ratios was driven by stress in the financial markets due to the Covid-19 pandemic, particularly in March. For most asset classes, returns were negative for the quarter,” states Ned McGuire, managing director and a member of the Investment Management and Research Group of Wilshire Consulting.
“The first quarter’s funded ratio is now at its lowest level in the 30 years that Wilshire has been aggregating data for state pension plans,” McGuire adds.
The aggregate figures represent an estimate of the combined assets and liabilities of state pension plans included in Wilshire’s 2020 state funding study. The funded ratio is based on liabilities, service cost, benefit payments and contributions in-line with Wilshire’s 2020 state funding study.
