State Pension Funding Reaches 75%, Wilshire Says in Study
By Darrell Preston - Mar
5, 2014 - Bloomberg
U.S. state pensions driven by a booming stock market continued to recover
last year as the value of their assets rose to 75 percent of liabilities, up 3
percentage points from 2012, according to Wilshire Consulting.
The funding level was the highest since 2008, when it reached 81 percent,
according to data on 134 state retirement systems compiled by Santa Monica,
California-based Wilshire. The 10-year peak was 95 percent in 2007, while the
low was 64 percent in 2009.
gGlobal stock markets rallied strongly over the 12 months ended June 30,
2013,h Russ Walker, a co-author of the report and vice president of Wilshire
Associates, the parent of the consulting unit, said yesterday in a statement.
That offsetgweaker performance by global fixed incomeh and allowed pension
assets to catch up to liabilities.
The value of assets relative to liabilities is a measure of how much the
plans have in reserve to pay future benefits. Pension funds collect money and
invest it to pay workers after they retire.
The Standard
& Poorfs 500 Index (SPX) of U.S. stocks rose 30 percent in 2013, ending
the year at an all-time high for the first time since 1999.
Wilshire said pension assets grew by 8 percent to $2.12 trillion in 2013,
according to data from the most recent disclosure filings by pension plans.
To contact the reporter on this story: Darrell Preston in Dallas at dpreston@bloomberg.net
To contact the editor responsible for this story: Stephen Merelman at smerelman@bloomberg.net