Investment losses during April 2022 lowered the estimated funded status of the 100 largest U.S. public pension plans from 82.7% at the end of March 2022 to 78.6% at the end of April 2022, as measured by the Milliman 100 Public Pension Funding Index (PPFI). The deficit between the estimated assets and liabilities rose from $1.000 trillion to $1.243 trillion during April.
Figure 1: PPFI funded ratio
In aggregate, we estimate the PPFI plans experienced investment returns of -4.75% in April, with individual plans’ estimated returns ranging from -7.23% to -1.78%. The Milliman 100 PPFI asset value decreased from $4.796 to $4.567 trillion in April. The plans lost market value of approximately $221 billion, on top of approximately net negative cash flow of $8 billion.
Figure 2: PPFI investment returns
The total pension liability (TPL) continues to grow and stood at an estimated $5.810 trillion at the end of April 2022, up from $5.796 trillion at the end of March 2022. Just as pension assets grow over time with investment income and shrink over time as benefits are paid, so too does the TPL grow over time with interest and shrink as benefits are paid. The TPL also grows as active members accrue pension benefits.
Figure 3: PPFI funded status
The market decline pushed 11 plans below the 90% funded mark; now 27 plans stand above this benchmark compared to 38 at the beginning of April. Meanwhile, at the lower end of the spectrum, one plan fell below 60% funded, bringing the total number of plans under this mark to 21, up from 20 at the beginning of April.
Figure 4: Funded ratios at April 30, 2022
About the Public Pension Funding Index
This update is an estimate based on Milliman’s annual Public Pension Funding Study and updated for market returns from June 30, 2021, to April 30, 2022. The 2021 annual study reflects adjustments made as of the end of June 2021 to reflect updated publicly available asset and liability information gathered for the annual study.