100 Largest Public Pensions on the Rise
The aggregate funded status for the one hundred largest public pensions has risen to seventy three percent. These figures are as of 30 June 2017. This is up from seventy two percent which was recorded on 31 March 2017.
This increase in funding was a direct result of the aggregate investment returns which were just over three percent for the quarter. This was a 0.83 percent increase when it came to liabilities, which sat at $4.74 trillion. The good news is that assets rose to 2.16 percent or $3.46 trillion for the same quarter.
19 Plans with Over 90% Funding Ratio
One hundred pension plans were analyzed during the report of which nineteen of them held funding ratios that sat above ninety percent. Sixty of the plans were sitting at funding ratios of sixty to ninety percent and twenty one had funding ratios under sixty percent. This is an improvement on the last report from 31 March 2017 which showed only fifteen of the plans having funding ratios above ninety percent, sixty four had ratios of between sixty and ninety percent and the same applied as the last quarter with twenty one having below sixty percent.
This increase can be seen from the report from 31 December 2016 which showed only ten plans having funding ratios more than ninety percent, sixty five plans had ratios of sixty to ninety percent and twenty five plans had their ratios sitting under sixty percent.
Some Almost Doubled
Looking at the first six months in 2017, the plans which funded ninety percent or more had almost doubled, which is an impressive improvement. Strong market returns have been responsible for the boosting of these pension plans over the first half of the year. The problem comes in with the lowest funded plans, they don’t have enough invested in the market to see the improved conditions and increase their funded ratios as a result. This means that unless they receive more contributors from sponsors, they may find themselves unable to pay out the expected benefices in the long run.
This is why its essential to always seek financial advice from a professional before investing in any pension plans to ensure you safeguard your money and build it up so you can enjoy your retirement.