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"Our study provides an independent investment return assumption, which we use to recalibrate the liabilities for these 100 plans," said
This year's study revealed a number of other developments. The number of retired/inactive members in these 100 plans grew from 11.8 million members to 12.1 million. In the aggregate, the plans currently have sufficient assets to cover 100% of the sponsor-reported accrued liability for retirees and inactive members, but beyond that would cover only 29% of the liability for active plan members.
This year's study explores whether poorly funded public plans are more apt to use unrealistically high investment return assumptions or invest disproportionately in risky investments. Contrary to common perception, the study finds that there is in fact very little correlation between a plan's funded status and the use of high interest rates or riskier investments.
Milliman is among the world's largest providers of actuarial and related products and services. The firm has consulting practices in healthcare, property & casualty insurance, life insurance and financial services, and employee benefits. Founded in 1947, Milliman is an independent firm with offices in major cities around the globe. For further information visit www.milliman.com.
About the Milliman Public Pension Funding Study
The Milliman Public Pension Study is based on the most recently available Comprehensive Annual Financial Reports and actuarial valuation reports, which reflect valuation dates ranging from