Calendar year 2022 presented several challenges for those managing pension fund assets. Equable Institute, in its year-end update to State of Pensions 2022 (released Jan. 10) estimates that once all public pension plans release their 2022 data, the combined funded status for the top state and local retirement systems will be 77.3 percent for the year — a significant decrease from the 83.9 percent funded ratio during fiscal year 2021.
Although the investment losses in 2022 didn't wipe out all the funded status gains from 2021, the sharp losses have exposed the lack of resilience plaguing many public pension plans.
Factors such as interest rate hikes, the continuing war in the Ukraine and the end of China’s Zero-COVID policy are expected to create near-term pressures on global commerce in 2023. This signals that many pension funds are unlikely to hit their assumed rates of return for 2023, even if they do generate a positive overall return.
The report
