National Conference on Public Employee Retirement Systems

The Voice for Public Pensions

Print Page

Blog

NCPERS Study: Public Pensions Demonstrate Fiscal Strength as Average Funded Ratios Reach Five-Year High

Annual Study Reveals Trends in Fiscal, Operational, and Business Practices
 
Media Contact: Lizzy Lees, llees@ncpers.org

February 24, 2025, WASHINGTON, D.C. – Public pensions continue to see improvements in fiscal performance as average funded ratios reached a five-year high of 83.1%, according to a new report from the National Conference on Public Employee Retirement Systems (NCPERS). Conducted annually since 2011, the Public Retirement Systems Study serves as a key resource that helps public pensions benchmark their performance and provides valuable insights into public sector retirement trends.

2025 Public Retirement Systems Study: Trends in Fiscal, Operational, and Business Practices reflects data from 201 public pensions that collectively oversee $3 trillion in retirement assets on behalf of more than 17 million state and local public servants. This year's study, conducted in partnership with Greenwald Research, breaks down financial and investment data by fiscal year-end dates to more clearly reflect performance trends over time.

Responding plans with fiscal year-end dates in the first half of 2024 reported average funded ratios of 83.1% and saw one-year investment returns of 9.47% (net of fees). The average amortization period for these systems also reached a three-year low of 18.5 years.

Notably, the report reinforces findings from previous research about the impact of employers' funding discipline on the health of pension plans. Responding systems that received their full actuarially determined contribution reported funded ratios an average of 20 percentage points higher than those that did not receive the full contribution.

“Public pensions have proven to be resilient as they've adapted to economic shifts while continuing to strengthen their financial footing,” said Hank Kim, executive director and counsel for NCPERS. “This study reaffirms that sound governance and disciplined funding strategies are key to long-term stability.”

In addition to the report, an interactive dashboard (login required) is available exclusively to NCPERS members. This tool allows users to filter data by plan size, employee type, and other datapoints to compare their own performance and practices against peers.

Among the key findings from the study:
  • While equities remain the largest component of pension portfolios, systems with fiscal year-end dates in the first half of 2024 reported a sharp increase in allocations to fixed income investments, now making up 26.1% of their portfolios.
  • Discount rates are slowly creeping down—declining from an average of 7.13% in first half of 2021 to 6.67% in the first half of 2024—indicating that responding plans' assumptions are getting more conservative.
  • Nearly three in four (73%) systems included cost of living adjustments (COLAs) in their most recent annual benefit calculations. The average COLA paid in the most recent fiscal year was 2.81%.
  • Most systems incorporate an investment smoothing period to recognize investment gains or losses over multiple years, which helps reduce volatility in funded ratios. Three in four systems that do so use a 5-year smoothing period.
  • As public pension systems look ahead, their top priorities include enhancing cybersecurity and fraud prevention systems, sustaining target funding levels, and updating or acquiring a pension administration system.
The full report provides further analysis, including a breakdown of financial and investment data over multiple years. Download the report.

To learn more about the study's most notable findings and survey methodology, register for our February 25th webinar or watch on demand in the Center for Online Learning.

About NCPERS
Established in 1941, the National Conference on Public Employee Retirement Systems (NCPERS) is the largest trade association working on behalf of public sector retirement systems. Organized as a 501(c)(3) nonprofit organization with a diverse membership that includes 500 plans, plan sponsors, and stakeholders who collectively oversee approximately $6 trillion in retirement funds, NCPERS works to protect and expand pension access through essential education, innovative research, and unwavering advocacy. From the largest statewide systems to the smallest local funds, NCPERS members make possible the work to safeguard the retirement security of more than 20 million teachers, police, firefighters, and other public servants.
 
# # #

Comments

There have been no comments made on this article. Why not be the first and add your own comment using the form below.

Leave a comment

Please complete the form below to submit a comment on this article. A valid email address is required to submit a comment though it will not be displayed on the site.

HTML has been disabled but if you wish to add any hyperlinks or text formatting you can use any of the following codes: [B]bold text[/B], [I]italic text[/I], [U]underlined text[/U], [S]strike through text[/S], [URL]http://www.yourlink.com[/URL], [URL=http//www.yourlink.com]your text[/URL]

Contributors