Pension plans are in a good place, according to a survey of public pension plan administrators from the National Conference on Public Employee Retirement Systems. Administrators rated their confidence in their plans on a 10-point scale; the average rating was 7.9, up slightly from 2013 and up from 7.4 in 2011.
Part of that confidence certainly comes from better funding levels. The survey found the average funded level increased to over 71% thanks to lower amortization periods and average one-year investment returns of 15%.
NCPERS partnered with Cobalt Community Research to conduct the survey. Respondents included 187 state, local and provincial government pension funds with almost 12 million participants and assets over $1.8 trillion. Data was collected in September and October.
“There is no question that public pension funds are continuing their strong recovery from the historic market downturn of 2008-2009,” NCPERS executive director and counsel Hank Kim said in a statement. “The survey shows public pensions are strong and getting stronger, managing their assets efficiently and effectively, making plan design changes to ensure sustainability and are expressing strong and growing confidence about their readiness to address the challenges ahead.”
In addition to improvement in the one-year investment returns, three-year returns increased to 10.3%, up from 10%. The most shocking change came in five-year returns, which increased from 2.7% last year to 9.8%.