Milliman analysis: Public pensions rebound in Q2 with $308 billion asset gain

SEATTLE, July 10, 2020 /PRNewswire/ -- Milliman, Inc., a premier global consulting and actuarial firm, today released the second quarter 2020 results of its Public Pension Funding Index (PPFI), which consists of the nation's 100 largest public defined benefit pension plans.

During Q2 2020, public pension funding rebounded gaining $308 billion in the market value of assets and reversing Q1 losses. The PPFI plans saw investment returns of approximately 10.72% for the quarter, nearly completing the recovery from the -10.81% returns suffered in Q1. The estimated funded ratio for these pensions rebounded from 66.0% at the end of March 2020 to 71.2% at the end of June 2020.

"While public pension funding status has improved dramatically over the past three months, the longer-term economic impact of COVID-19 on funding remains uncertain," said Becky Sielman, author of the Milliman 100 Public Pension Funding Index. "Returns for the past twelve months ending June 2020 averaged just 3.84% - markedly lower than plan sponsor reported funding interest rates – which means the 2019-2020 reporting year will likely go into the books as a year of modest investment losses, despite the Q2 rally."

As of Q2 2020, there are 12 PPFI plans above the 90% funded mark; just four plans stood above this benchmark at the end of Q1 2020. Meanwhile, at the lower end of the spectrum seven plans moved above 60% funded, bringing the total number of plans under this mark to 28, down from 35 at Q1 2020.

To view the Milliman 100 Public Pension Funding Index, go to http://www.milliman.com/ppfi/. To receive regular updates of Milliman's pension funding analysis, contact us at pensionfunding@milliman.com.

About Milliman
Milliman is among the world's largest providers of actuarial and related products and services. The firm has consulting practices in healthcare, property & casualty insurance, life insurance and financial services, and employee benefits. Founded in 1947, Milliman is an independent firm with offices in major cities around the globe. For further information, visit milliman.com.

About the Milliman Public Pension Funding Index
Since 2012, Milliman has conducted an annual study of the 100 largest defined benefit plans sponsored by government jurisdictions in the U.S. The Milliman 100 Public Pension Funding Index projects the funded status for pension plans included in our study, reflecting the impact of actual market returns, utilizing the actual reported asset values, liabilities, and asset allocations of the pension plans. The results of the Milliman 100 Public Pension Funding Index are based on the pension plan financial reporting information disclosed in the plan sponsors' Comprehensive Annual Financial Reports, which reflect measurement dates ranging from June 30, 2016, to December 31, 2018. This information was summarized as part of the Milliman 2019 Public Pension Funding Study, which was published on January 20, 2020.

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SOURCE Milliman, Inc.