The report covers more than 1,700 institutional investment funds with combined assets of more than $3.46 trillion and was compiled by Wilshire’s Trust Universe Comparison Service. The survey includes 275 public pensions.
Wider Deficits
State public pensions in the U.S. had unfunded liabilities of $833 billion as of fiscal 2011, a 10 percent wider gap than in the previous year, as the plans continued phasing in 2008 and 2009 losses, according to a July report from Standard & Poor’s. S&P also cited increased longevity for beneficiaries and previously granted retirement sweeteners.
The average funded ratio, or the value of projected assets divided by estimated long-term liabilities, fell about 1 percentage point to 72.9 percent in 2011. The drop was 1.6 percentage points in 2010 and 7 percentage points in 2009, according to the S&P report.
“U.S. state pensions are showing some signs of stabilization, but significant improvement in funded levels will take many more years,” S&P analysts led by John Sugden in New York said in the report.
Calpers Gains
On July 15, the California Public Employees’ Retirement System, the biggest U.S. pension with $267.8 billion in assets as of Aug. 2, reported a preliminary 2013 return of 12.5 percent. The pension listed its funded ratio as 73.6 percent at the end of last week.
New York City’s $137 billion pension system reported a 12.3 percent preliminary gain for fiscal 2013 on July 18, while Maryland’s retirement plans on July 16 posted a 10.6 percent net return after management fees.
Corporate pensions had a median return of 10.1 percent for fiscal 2013, while for foundations and endowments, the gain was 11.3 percent, according to Wilshire.
New York City’s five pensions benefited by increasing their stock holdings to 70 percent of total assets, the most allowed by policy, from 64 percent, said Larry Schloss, the city’s chief investment officer. The pensions reduced bond allocations to 30 percent from 36 percent.