It’s something that NCPERS has been reporting for several years now, in the results of its annual survey of public pension plans. And as you might expect, it’s been an uphill struggle to get the good news out when political figures high and low have been employing media-grabbing rhetoric to demonize public pensions as the root of state and local economic ills since the Great Recession blindsided all of us in 2008.
Three new studies are proving our point: while, like all institutional investors, public pension plans were hit hard by the Great Recession, they have experienced a robust recovery due to increasing market returns and operational reforms.
These research findings should be made required reading for anyone and everyone in public office:
An analysis by the California-based, global investment consulting firm Wilshire Associates shows that last year’s surge in U.S. equities helped U.S. public pensions achieve median gains of 16.1 percent in 2013 – marking the fourth time in five years that public funds earned double-digit returns.
Smaller pension plans, which invest a greater share of their assets in U.S. stocks, beat plans with assets of more than $5 billion, Wilshire found. State and local government funds with less than $1 billion in assets realized a median return of 16.45 percent, while mega plans saw returns of 15.76 percent.
And Census Bureau data show that the rising tide of investment returns lifted the assets of the 100 biggest U.S. public pension funds to $3.06 trillion in 2013’s third quarter – their highest level since 1968.
A study by the leading global professional services company Towers Watson offers similarly optimistic findings – both for retirement assets here in the U.S. and around the world.