Industry News

In February 2019, the Wisconsin Legislative Council released its report, 2017-18 Comparative Study of Major Public Employee Retirement Systems. The survey covers retirement benefits for general employees and teachers in 87 large public retirement systems.  The study provides information regarding retirement benefits, employer and employee contributions, actuarial methods and assumptions, plan funding, and other relevant topics.

The systems in the survey cover 11.4 million active employees and 8.3 million retirees, for a total of 19.7 million participants.  From 2015 to 2017-18, the number of active participants increased 3.2%, while the number of retirees and beneficiaries increased 10.5%, resulting in the ratio of active to retiree members falling from 1.74 in 2015 to 1.48 in 2017-18.

In 2017-18, the funded ratios for the group were distributed as follows:

• 2% had funded ratios of over 100%;
• 15% had funded ratios of 90-100%;
• 16% had funded ratios of 80-89%;
• 24% had funded ratios of 70-79%;
• 23% had funded ratios of 60-69%;
• 13% had funded ratios of 50-59%; and
• 7% had funded ratios of less than 50%.

From 2008 to 2017-18, the percent of plans with high funded ratios (i.e., ratios over 100%) declined from 12% in 2008 to 2% in 2017-18, while the percent of plans with relatively low funded ratios (i.e., ratios between 60%-79%) rose from 35% in 2008 to 47% in 2017-18.  Additionally, the percent of plans with funded ratios of 90% or more declined from 33% in 2008 to 17% in 2017-18.

Of the plans studied, 76% had interest rate assumptions of 7%-8% in 2017-18. Additionally, 22% of plans had interest rate assumptions of 5%-7% and 2% had interest rate assumptions over 8%.

The study is available here.