Industry News

On February 8, 2024, the National Conference of Public Employee Retirement Systems (NCPERS) released the results of its NCPERS 2024 Public Retirement Systems Study: Trends in Fiscal, Operational, and Business Practices. The annual comprehensive survey provides information on investment experience, actuarial assumptions, plan administration and operations, trends, innovations and best practices.  

Some of the key findings include:  

• During 2023, the average funding levels (the value of the assets in the pension plan divided by an actuarial measure of the pension obligation) decreased. Average funding levels declined to 75.4% in 2023 from 77.8% in 2022. 
• Of the reporting pension systems, investment returns were the most significant source of revenue at 63% of overall pension revenues while employer contributions totaled 28% and employee contributions totaled 9%.
• In 2023, the average investment return assumption was 6.91% compared with 6.86% in 2022 for responding funds.
• Overall, the reporting funds experienced varying returns. On average, 20-year returns were 7.3%, 10-year returns were 7.9%, 5-year returns were 6.8%, and 1-year returns were -1.9%. 
• Of those reporting funds that offered a cost-of-living adjustment (COLA) for members, the average was 2.2% in 2023 as compared with 2.0% in 2022.
• The overall average expense for administering the funds was 56 basis points (or 56 cents per $100 invested). 

The survey included 157 state and local government pension funds with more than 13.8 million active and retired members and total assets exceeding $2.3 trillion.  Of the pension funds surveyed, 52% were local government funds and 48% were state pension funds.  

The report is available here.