The average funded ratio for American public pension plans was 78.1 percent at the end of the 2023 fiscal year, according to Equable’s recent The State of Pensions 2023 Year End Update, authored by Anthony Randazzo and Jonathan Moody.
That rate is an improvement over 2022’s 74.9 percent funded ratio, but is still cause for concern and reveals the need for government employers to increase regular contribution rates. A gap of $1.4 trillion exists, separating the current total funded ratio from what it would take to have 100 percent funded plans. That is down from $1.6 trillion in 2022.
Randazzo and Moody observe that an emerging trend among pension funds is increased investment in private debt, as well as expanding allocations to existing private-equity holdings.
State and local pension funds generated average returns of 7.05 percent for the fiscal year. When including the estimated returns for pension plans that operate with Dec. 31 fiscal year end d
