https://www.americancityandcounty.com/wp-content/themes/acc_child/assets/images/logo/footer-logo.png
  • Home
  • Co-op Solutions
  • Hybrid Work
  • Commentaries
  • News
  • In-Depth
  • Multimedia
    • Back
    • Podcast
  • Resources & Events
    • Back
    • Resources
    • Webinars
    • White Papers
    • IWCE 2022
    • How to Contribute
    • Municipal Cost Index – Archive
    • Equipment Watch Page
    • American City & County Awards
  • About Us
    • Back
    • About Us
    • Contact Us
    • Advertise
    • Privacy Statement
    • Terms of Service
American City and County
  • NEWSLETTER
  • Home
  • Co-op Solutions
  • Hybrid Work
  • Commentaries
  • News
  • In-Depth
  • Multimedia
    • Back
    • Podcasts
  • Resources/Events
    • Back
    • Webinars
    • White Papers/eBooks
    • IWCE 2022
    • How to Contribute
    • American City & County Awards
    • Municipal Cost Index
    • Equipment Watch Page
  • About Us
    • Back
    • About Us
    • Contact Us
    • Advertise
    • Cookie Policy
    • Privacy Stament
    • Terms of Service
  • newsletter
  • Administration
  • Economy & Finance
  • Procurement
  • Public Safety
  • Public Works & Utilities
  • Smart Cities & Technology
  • Magazine
acc.com

Administration


Unsplash/Michael Longmire

News

Report: In a year marked by economic hardship, public pension funding is up

Report: In a year marked by economic hardship, public pension funding is up

  • Written by Andy Castillo
  • 28th October 2021

In a year filled with gloomy news of economic hardships and the ongoing pandemic, there’s a bright spot: the funded ratio of the 100 largest U.S. public pensions is up by more than 15 percent this year, according to Milliman’s annual analysis. 

“Surging market returns have propelled pension assets far beyond previous levels, driving the estimated funding deficit below $1 trillion for the first time since 2012,” the report says. “We estimate that nearly half of the plans in the study stood above 90 percent funded as of June 30.” 

Only 13 public pension plans were above 90 percent funded based on Milliman’s 2020 analysis. 

The study, which was released this month, analyzed data from each plan’s most recent fiscal year-end report, according to the report. Specifically, Milliman’s analysis estimates that “aggregate plan assets rose significantly from $3.90 trillion as of the most recent measurement dates to $4.82 trillion.” The 100 plans “reported benefit payouts totaling $298 billion in their most recent measurement years. Reported contributions totaled $209 billion, with $157 billion and $52 billion provided by employers and members, respectively.” 

“The stellar funding improvement in the first half of 2021 is likely welcome news to plan sponsors, given the volatility of the previous 12 months,” said Becky Sielman, author of the report, in a statement. “But with the lingering impacts of the COVID-19 pandemic and systems’ volatility dampening mechanisms in place, we’re not likely to see budgetary relief from this improvement, at least in the short-term.” 

Notably, the aggregate funded ratio for the public pensions analyzed in the report has hovered around 70 percent since 2017, ending at 72.7 percent in 2019. Over 2020, funding fell slightly to 71 percent “Due in large part to extreme market volatility amid the onset of the COVID-19 pandemic in the early part of 2020,” the report says. Besides this volatility, “we expect that furloughs and shutdowns have impacted pay levels and employee contribution amounts. Constrained tax revenues and shifting budget priorities may have caused some employers to pull back on their contributions as well.” 

Funding climbed quickly this year as the economy restarted—following a year of lockdown mandates—finishing at the end of June at 85 percent. 

It’s an impressive uptick given the year’s abnormal economic landscape. Citing public pension data from the Center for Retirement Research, a brief from MarketWatch notes this is the highest aggregate funded ratio since 2007. Based on the report, 80 percent of the plans studied provided an “estimated employer-paid pension benefit” up to 10 percent. The most common level was around 4 to 6 percent. 

The aggregate funded ratio is calculated by subtracting pension fund obligations from assets.  

But while the percentage increase is encouraging, the report highlights a foreboding figure that could impact the long-term fiscal health of public pensions: “The number of active members covered by these plans has been essentially flat for the past eight years, while the number of retired and inactive members has increased each year,” the report says. 

Specifically, since 2013, the number of active members contributing to pension plans has remained steady at around 12.5 million public employees. Meanwhile, the number of retirees drawing from those plans has jumped from 11.8 to 14.8 million people. 

Tags: homepage-featured-1 homepage-featured-2 homepage-featured-4 Administration News Administration News News

Most Recent


  • Report: Local and state governments are facing a retention crisis; the worst could be yet to come
    When the pandemic struck in 2020, public retention was hit hard: jobs in local government plummeted by 8.5 percent; state employment dropped by 4.4 percent. Two years later, local and state government jobs have rebounded by about half—to 4.1 and 1.9 percent below pre-pandemic levels respectively, according to a new report from Mission Square Research […]
  • Amid an unprecedented increase in federal spending, cities and counties stand to benefit from partnerships
    The so-called “American dream” of upward mobility has more or less stagnated: Today, a little more than 40 percent of children raised at the bottom of the income ladder remain there as adults, according to Pew Charitable Trusts, and only half grow up to earn more than their parents. This data points to a concerning […]
  • Seattle-Tacoma-Bellevue, WA
    Infrastructure highlighted by city leaders as top priority in analysis of 60 mayoral addresses
    After two years of ping-pong lockdown orders, mask mandates, unprecedented vaccine drives and economic uncertainty, cities across the United States are beginning to emerge in the pandemic’s aftermath, and they’re prioritizing infrastructure, according to a report published Wednesday by the National League of Cities (NLC).  “The new normal, as we now understand it, is here,” […]
  • employees
    Oklahoma City puts the focus on employees when implementing changes in office technology
    The City of Oklahoma City (OKC) is no stranger to growing pains. Like so many cities and local governments facing budget, resource and time constraints, the fastest-growing city in Oklahoma has, at times, had to do more with less. But despite this, we’ve remained committed to advancing our city forward and putting our 5,000+ employees […]

Leave a comment Cancel reply

-or-

Log in with your American City and County account

Alternatively, post a comment by completing the form below:

Your email address will not be published. Required fields are marked *

Related Content

  • Pension funding is down over the last decade, but has held steady through the pandemic
  • Drawn-out Congressional debt ceiling debate could have negative implications for cities
  • Like many other American cities, Milwaukee faces a looming pension funding gap
  • Employment in the public education sector has rebounded, but educators still face an uncertain future

White papers


How to Assemble a Rockstar Website Redesign Steering Committee

7th June 2022

Hand Hygiene: Compliance Matters

23rd May 2022

What it Takes to Build a Winning Esports Program

23rd May 2022
view all

Events


PODCAST


Young Leaders Episode 4 – Cyril Jefferson – City Councilman, High Point, North Carolina

13th October 2020

Young Leaders Episode 3 – Shannon Hardin – City Council President, Columbus, Ohio

27th July 2020

Young Leaders Episode 2 – Christian Williams – Development Services Planner, Goodyear, Ariz.

1st July 2020
view all

Twitter


AmerCityCounty

Report: Local and state governments are facing a retention crisis; the worst could be yet to come dlvr.it/SSnmS7

24th June 2022
AmerCityCounty

Amid an unprecedented increase in federal spending, cities and counties stand to benefit from partnerships dlvr.it/SSkGBn

23rd June 2022
AmerCityCounty

Governments using technology to harness data and improve decision-making dlvr.it/SSk3H0

23rd June 2022
AmerCityCounty

Infrastructure highlighted by city leaders as top priority in analysis of 60 mayoral addresses dlvr.it/SSgBck

22nd June 2022
AmerCityCounty

Oklahoma City puts the focus on employees when implementing changes in office technology dlvr.it/SSfyns

22nd June 2022
AmerCityCounty

We want to hear from you! Please take this brief survey and let us know how your organization is managing your budg… twitter.com/i/web/status/1…

22nd June 2022
AmerCityCounty

Buying smart solutions: Technology is now part of (almost) every government purchase dlvr.it/SSbj3Z

21st June 2022
AmerCityCounty

Amid tech labor shortage, outsourcing digital services could provide relief dlvr.it/SSbj23

21st June 2022

Newsletters

Sign up for American City & County’s newsletters to receive regular news and information updates about local governments.

Resale Insights Dashboard

The Resale Insights Dashboard provides model-level data for the entire used equipment market to help you save time and money.

Municipal Cost Index

Updated monthly since 1978, our exclusive Municipal Cost Index shows the effects of inflation on the cost of providing municipal services

Media Kit and Advertising

Want to reach our digital audience? Learn more here.

DISCOVER MORE FROM INFORMA TECH

  • IWCE’s Urgent Communications
  • IWCE Expo

WORKING WITH US

  • About Us
  • Contact Us

FOLLOW American City and County ON SOCIAL

  • Privacy
  • CCPA: “Do Not Sell My Data”
  • Cookies Policy
  • Terms
Copyright © 2022 Informa PLC. Informa PLC is registered in England and Wales with company number 8860726 whose registered and Head office is 5 Howick Place, London, SW1P 1WG.
This website uses cookies, including third party ones, to allow for analysis of how people use our website in order to improve your experience and our services. By continuing to use our website, you agree to the use of such cookies. Click here for more information on our Cookie Policy and Privacy Policy.
X