NASRA Releases Results from National Survey of Public Pension

Public pension funding levels have declined according to this year’s Public Fund Survey, an annual overview of public pension plan financing, membership and design. This year's summary is the first following the sharp drop in global investment markets that occurred in 2008. The survey is an online compendium of key characteristics of the nation's largest public retirement systems and is sponsored by the National Association of State Retirement Administrators (NASRA) and the National Council on Teacher Retirement.

According to the report, the 2008 fall in pension asset values has caused aggregate public pension funding levels to move downward from 86.7 percent in FY 2007 to 85.3 percent in FY 2008. Because public pension actuarial methods are designed to temper the effect of market volatility, public pensions will recognize the investment losses incurred in 2008 over several years. During this recognition period, funding levels are expected to decline, although losses may be partially offset with investment gains.

The author anticipates that future funding levels will also be influenced to the extent sponsoring state and local governments consider adjustments to benefit levels and financing arrangements, such as reduced benefits for future hires, reduced future accruals, and/or higher contributions for both employers and employees.

View the entire report by clicking here.