Report: U.S. Public Pension Funding Up 6 Percent in 2013

Graph With Stacks Of Coins

Funding ratios of the largest public pension plans across the country have improved since last year to the tune of 6 percent, according to report by Wilshire Consulting released Monday morning. From Reuters:

In the study provided to Reuters, Wilshire estimated 109 state retirement systems had enough assets to cover 73 percent of their obligations in the year ended June 30, 2013, up 5.7 percent from 69 percent in 2012. Still, 90 percent of those plans were considered under funded.

Russ Walker, vice president at Wilshire Associates and an author of the report, attributed the rise to the strong rally of global stock markets over the 12 months, offsetting “weaker performance by global fixed income and allowing pension asset growth to outdistance the growth in pension liabilities over fiscal 2013.”

For years, many states short-changed their public pensions, putting in far less than recommended by actuaries. The 2007-2009 recession further cut revenues, while plans’ investments, which provide two-thirds of revenues, went into a downward spiral.


Pension assets totaled $428.9 billion, while liabilities were $589.7 billion, reported Wilshire, a Santa Monica, California-based independent investment consulting firm. Of the retirement systems studied by Wilshire, 34 had equity allocations that equal or exceed 70 percent, while 14 systems were below 50 percent.

As the report notes, the vast majority of plans (90 percent) are still considered underfunded despite 2013’s improvement.

Experts generally consider an 80 percent funding ratio the lower limit of a “healthy” pension plan.