Thanks to strong financial market performance and a healthy average investment return, the funded status for local and state pension funds has improved in 2024. However, these plans remain fragile, as 2024 became the 17th consecutive year with an average funded ratio below 90 percent, according to Equable’s The State of Pensions 2024 Year End Update.
Pension funds’ average investment return in 2024 of 10.3 percent is better than the expected rate of return of 6.87 percent but is still less than the performance of major public equity indices. This can be attributed to poor performance of fixed income investments during the past year, says the report.
Three years of improved funded status for public plans has prevented additional unfunded liabilities from compiling; however, there is more than a trillion dollars in pension liabilities. To reduce this debt, contribution rate increases are necessary. To pay down unfunded liabilities, governments must be willin
