As reported by Pensions & Investments online, the aggregate funded status of local government pension plans was 69% for the 2012 fiscal year, down 11 percentage points from the previous year, according to a report from Wilshire Associates on 106 city- and county-sponsored defined benefit plans.
Of the 105 plans that reported actuarial values on or after June 30, 2012, the funded status plummeted despite pension assets increasing by 2% to $387 billion for the 105 plans. Liabilities increased at an astronomic 16% rate to $560.6 billion.
“On the liability side, they’re growing at a rate that the assets can’t keep up with,” said Russell Walker, vice president and co-author of the report, in a telephone interview.
However, Mr. Walker estimated the aggregate funded status could be up to 75% for the 2013 fiscal year, mentioning diversification of assets and efforts to rein in liability growth as two helpful factors.
For more information, see the full story from Pensions & Investments.