Industry News

In May 2021, Goldman Sachs Asset Management (GSAM) released its report, Public Pension Quarterly Q1 2021: Turning the Corner. According to GSAM, the public pension funds that were in the best financial health at the beginning of the pandemic were the hardest hit in their funded statuses over 2020. However, the report noted that those funds have also experienced a speedy recovery.

Furthermore, plans that experienced larger declines in funded status may have “erased” losses and experienced “incrementally higher asset returns and funded status gains” due to risk assets improving through the end of the year.

In the first quarter of 2021, GSAM estimated that, in aggregate, public pension assets returned about 3%, resulting in the estimated aggregate funded status of the sample plans increasing approximately 1% year-to-date through March 31, 2021. The improvement was attributable to the subsiding effects of the pandemic such as rising vaccination numbers, declining initial jobless claims, and increasing consumer confidence.

According to the report, “Year over year, strong asset performance experienced by plans since the end of March last year has resulted in the improvement of many plans’ funded status. While the top quartile of plan funded status was estimated to be between 81-90% at the end of March 2020, this figure likely increased to a range of 91-100% by March 2021.”

The report is available here.