State pension plan assets increased by nearly six percentage points in fiscal 2018, according to a report by Wilshire Consulting.
Pension assets grew to $3.1 billion from $2.9 billion in 2017, while aggregate total pension liability rose more than 3 percent to $4.3 billion from $4.1 billion, according to a news release.
The funding ratio of state pension plans rose 1.7 percentage points to 72.2 percent in fiscal year 2018. The funded ratio at the beginning of the year was 70.5 percent. The release noted that this year’s rise marks two consecutive years of aggregate funded ratio increases.
Benefit accruals and interest cost decreased the funded ratio by nearly six percentage points, but this was more than offset by total contributions and asset returns, which increased the funded ratio by over nine percentage points, the report said.
“The biggest year-over-year change has been the increase in plans with funded ratios between 70 and 80 percent,” Ned McGuire, managing director and a member of the Pension Risk Solutions Group of Wilshire Consulting, said in a prepared statement.
On average, state pension plans allocated 57.8 percent to equity in 2018, 23.7 percent to fixed income and 18.5 percent to real assets, alternatives and cash.
Over the past 10 years, equity allocations have declined by nearly five percentage points, the release said, adding that allocations to private equity increased by more than four and a half percentage points and U.S. equity allocations declined by nearly nine percentage points.
The 2019 Wilshire Consulting Report on State Retirement Systems is based on data from 134 retirement systems sponsored by the 50 states and the District of Columbia.