State and Local Pensions Remain Stable Despite Market Turbulence

  • 📰 MarketWatch
  • ⏱ Reading Time:
  • 29 sec. here
  • 2 min. at publisher
  • 📊 Quality Score:
  • News: 15%
  • Publisher: 97%

Business News News

Business Business Latest News,Business Business Headlines

U.S.’s state and local pension picture is brightening

My colleagues JP Aubry and Yimeng Yin just released an update on state and local pension plans. Their analysis compared 2023 to 2019 – the year before all the craziness began. Think of the unusual events that have occurred in the last few years: 1) the onset of COVID; 2) the subsequent COVID stimulus; 3) declining interest rates; 4) rising inflation; and then 5) rising interest rates.

While the aggregate funded ratio provides a useful measure of the public pension landscape at large, it also can obscure variations in funding at the plan level. Figure 2 separates the plans into thirds based on their current actuarial funded status. The average 2023 funded ratio for each group was 57.6% for the bottom third, 79.5% for the middle third, and 91.1% for the top third.

The effect of fixed income’s decline on overall portfolio performance has been modest because, since 2019, fixed income has averaged only about 20% of pension fund assets .

 

Thank you for your comment. Your comment will be published after being reviewed.
Please try again later.
We have summarized this news so that you can read it quickly. If you are interested in the news, you can read the full text here. Read more:

 /  🏆 3. in BUSİNESS

Business Business Latest News, Business Business Headlines