Contributions to public pension plans have increased in recent years, but their unfunded liabilities have increased more, according to an analysis by the Society of Actuaries released Wednesday.
Between 2006 and 2014, employer contributions increased 76%, up to $85 billion in 2014 from $48 billion, and employee contributions increased 30%, to $37 billion from $28 billion. Total unfunded liabilities increased 150% to $1 trillion in 2014 from $400 billion in 2006, and the plans studied were 73% funded by the end of 2014.
S. public pension funds' unfunded pension liabilities are expected to rise through 2020, even under positive investment return scenarios, said a report Tuesday from Moody's Investors Service.
In its report, Moody's ran a sample of 56 plans with $778 billion in aggregate reported net pension liabilities through three different investment return scenarios. Due to reporting lags, most 2019 pension results appear in governments' 2020 financial reporting, Moody's noted. The plans had $1.977 trillion in trillion assets.
Under the first scenario with a cumulative investment return of 25% for 2017-'19, aggregate net pension liabilities for the 56 plans fell by just 1%. Under the second scenario with a cumulative investment return of 19% for 2017-2019, net pension liabilities rose by 15%. Under the third scenario with a 7.2% return in 2017, -5% return in 2018 and zero return in 2019, net pension liabilities rose by 59%.