Industry News

On February 17, 2022, the MissionSquare Research Institute (formerly the Center for State and Local Government Excellence at ICMA-RC or SLGE) published its report, Public Plans Database – Snapshot as of December 2021. According to the Institute’s latest Public Plans Database (PPD) analysis, the funded status of state and local pension plans reached 75.4% in 2021, up from 72.2% in 2020. Since 2020, the funded status has increased during a period of strong investment returns and most state and local governments are contributing nearly all or more than the full Actuarially Determined Employer Contribution (ADEC).

Other key findings include: 

• According to the data available in 2021, plans have averaged contributions between 97% and 106% of the ADEC. As compared with 2010, plans in the top quintile by funded ratio contributed 99% of the ADEC, while those in the bottom quintile contributed only 78%.  
• Since 2005, the portion of pension fund investments has changed significantly for public plans with 29% of total portfolios invested in real estate, hedge funds, commodities, and alternative investments in 2020, up from 9% in 2001. 
• Among all sizes of public plans, the ratio of active workers to plan beneficiaries continues to decline, which may be due to the ongoing retirement of members of the baby boom generation and the departure of other employees during the Great Resignation. 

The report is available here.