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S&P Global Provides U.S. Public Pension Fiscal 2023 Update
Recently, S&P Global released its report, U.S. Public Pension Fiscal 2023 Update: Funded Ratios Stable, Inflation Retreats, and POB Issuance Stops. S&P Global reported that U.S. public pension funded ratios are projected to remain stable or slightly improve due to the expected improvements in asset performance for fiscal year ended June 30, 2023.
According to S&P Global, “After a slow start to the fiscal year, we estimate that a typical public pension plan will have experienced a return of around 9% for fiscal 2023…, which equates to a 2% gain for the year above the 7% return assumption.”
Other key highlights include:
- Although high inflation continues to move toward previous lows, volatility may affect pension funding if public pension plan sponsors experience budgetary stress; and
- Pension obligation bond (POB) issuances have completely ceased this year due to the expectation that volatile interest rates may decline in the near future.
The report is available here.