The funded status of private- and public-sector pension plans is a classic example of bad news/good news. To wit: Corporate pensions’ funded status fell in April, but only very slightly; and some states’ pensions are in bad shape, but funding of public-sector pension plans overall is improving.
As for the private sector, BNY Mellon Investment Strategy & Solutions Group (ISSG) reported that the typical U.S. pension plan’s funded status fell 1.1 percentage points in April. Andrew D. Wozniak, who heads ISSG’s Fiduciary Solutions group, attributed April’s drop to “significant declines by small cap stocks and private equity.” Even so, corporate plans’ funding stood at 91 percent by April.
As for the public sector, state and local pension liabilities may amount to $4 trillion, says BenefitsPro, citing a Nelson A. Rockefeller Institute of Government report. But the problem may not be widespread: Illinois alone accounts for $187 billion in pension liability, and New Jersey another $52 billion. And there is progress: Wilshire Consulting reported that state pension funding status stood at 75 percent by 2013, according to Bloomberg, which also notes that National Association of State Retirement System Administrators Research Director Keith Brainard said during a May 2 online conference that public-sector pension funding is getting better overall, and that his organization expects broad improvement.
And more hopeful news: ISSG reported that public pension plans met their targets in April. ISSG also says that public plans are ahead of their target by 1.8 percent for the year.
John Iekel is Senior Writer and Editor for the ASPPA Net and NTSA Net portals.
- Log in to post comments