Public pension plans well-funded.

• Position: News Briefs - Brief Article

Overall, the funding ratio of public pension plans increased to more than 103 percent as of the end of 2000, according to the latest survey from the Public Pension Coordinating Council. This represents a continued increase in funding ratios since the survey's inception more than 10 years ago and the first time that the average ratio has topped 100 percent. The funding ratio indicates that public plans are generally well funded and in strong financial health.

TIn 2001, 152 public employee retirement systems responded to the PPCC's survey, representing 263 retirement plans. These plans covered 67 percent of the 13.9 million active plan members reported by the U.S. Bureau of the Census and held 68 percent of the $2.3 trillion in state and local retirement system assets reported by the Federal Reserve.

The average annual benefit multiplier earned for each year of service changed very little between 1998 and 2000. The average multiplier grew from 2.06 percent of final average salary in 1998 to 2.11 percent in 2000. For members not covered under Social Security, the average benefit multiplier grew marginally from 2.39 percent to 2.43 percent during the two years.

Actuarial assumptions for investment return increased slightly from 7.90 percent to 7.95 percent between the two years. Assumptions regarding total salary increases fell...