Sign up today and take advantage of member-only content — the kind of timely, cutting edge industry insight that only Money Management Executive can deliver.
  • Exclusive Online Only Content
  • Free Daily Email News Alerts
  • Asset Management Blogs

Market Decline Takes Toll On State Pension Plans

State pension plans lost $122 billion in assets due to the sharp market decline of the past year, depleting their assets-to-liabilities ratio by 9%, according to a report by Wilshire Associates. The net result is that major state retirement systems' liabilities have outpaced growth in assets, according to the report, authored by Steve Nesbitt, senior managing director at Wilshire.

The financial outlook for underfunded systems has also declined. In 2001, pension plans' total underfunded liabilities ballooned to $94 billion from $50 billion the year before.

For the first half of this year, Wilshire predicts a 10%-15% decline in funding ratios and a 52%-75% increase in underfunded state pension plans.