Preview: Key Findings from NCPERS 2024 Public Retirement Systems Study
For the past 13 years, NCPERS has conducted its annual Public Retirement Systems Study to gather the most current available data on funds' fiscal, operational, and business practices.
By: Hank Kim, Executive Director and Counsel, NCPERS
For the past 13 years, NCPERS has conducted its annual Public Retirement Systems Study to gather the most current available data on funds' fiscal, operational, and business practices. Nearly 160 public retirement funds with more than 13.8 million active and retired members participated in the most recent study, which was conducted from September to December 2023.
NCPERS will host a webinar on February 13 where we'll discuss the methodology and share key insights from the soon-to-be released 2024 Public Retirement Systems Study. Register now to join the conversation and learn about the latest trends in public retirement benefits administration. The full results of the study will also be made available exclusively to NCPERS members via an interactive dashboard, allowing users to filter data for more relevant peer-to-peer benchmarking.
The preliminary analysis of NCPERS 2024 Public Retirement Systems Study data shows that the overall average expense to administer funds and pay investment fees decreased year over year to 56 basis points (down from 64 basis points). It's worth noting the data is based on reporting funds' most recent CAFR, so the data represents varying fiscal years.
Surveyed funds were asked to rate on a 10-point scale their readiness to address retirement trends and issues over the next two years. The results indicate an increase in fund confidence compared to the year prior. Despite this increase, market volatility and global economic uncertainty remain a challenge. Thus public pensions continue to tighten assumptions. Responding funds' aggregate discount rate was 6.91 percent, and the average amortization period was 20.4 years—a reduction of 0.4 years from the most recent study. In terms of sources of funding of public pensions, in the aggregate for every dollar of pension benefit paid, 63 cents are attributable to investment returns, 28 cents are from plan sponsor contributions, and nine cents are from employee contributions.
NCPERS conducts its Public Retirement Systems Study annually because public pensions are long-term investors who operate in complex environments. Funding ratios and investment returns rarely tell the whole story, so it's crucial to regularly benchmark overall fiscal and operational performance. There are new methods available to assess the health of public pensions, and having a clear understanding of the datapoints surrounding your fund can help you better educate policymakers, the public, and plan participants.
We hope you'll join us for the upcoming webinar to learn more about the 2024 Public Retirement Systems Study results. The full report and accompanying dashboard will be released in the coming weeks, and we hope they serve as valuable tools in understanding how your fund's fiscal and operational performance measures up.