The overall funding ratio of the 100 largest U.S. public pension plans fell to 74% as of June 30 from 78.4% one month earlier, according to the Milliman 100 Public Pension Funding index.
During the month of June, Milliman estimated the public pension plans had an aggregate investment return of -5.1%, with an estimated range of -7.5% to -2.3%. For the 12 months ended June 30, the annualized return was 20%.
"Public pensions have seen their funding tumble during June 2022, thanks to the continuing turmoil in financial markets," said Rebecca A. Sielman, principal and consulting actuary at Milliman and author of the Milliman 100 Public Pension Funding index, in a news release Thursday. "Combined with the normal growth in liabilities, these public pensions saw their aggregate deficit rise by $262 billion in June alone."
As a result of the poor investment returns, estimated assets fell to $4.31 trillion as of June 30 from $4.57 trillion as of May 31, while estimated liabilities rose slightly to an estimated $5.84 trillion from $5.83 trillion.
Of the 100 plans measured by the index as of June 30, 19 plans had funding ratios above 90%, compared with 27 a month earlier; while 26 plans were below 60% funded, up from 21 as of May 31. A total of 16 plans had ratios between 60% and 70%, 20 plans were between 70% and 80% and 19 plans were between 80% and 90%.
