By: Russ Kamp, CEO, Ryan ALM, Inc.

Milliman has released the output of their Public Pension Funding Index (PPFI), which covers the largest 100 public DB plans. Despite the turbulent markets during the month, the index showed a slight investment gain of 0.4%. This compares to the -0.12% experienced by corporate plans and reported through Milliman’s Pension Funding Index, that covers the top 100 corporate plans.

Among the largest public funds individual plans’ estimated returns ranged from -1.8% to 1.4%. In aggregate, the plans added about $24 billion in market value during the period, increasing AUM to $5.213 trillion at the end of the month. Furthermore, the deficit between plan assets and liabilities was unchanged since March at $1.34 trillion. The PPFI funded ratio rose from 79.5% as of March 31, to 79.6% as of April 30th. If pension liabilities for public plans were valued using the same discount rate as corporate plans do under FASB, liability growth would have been negative, as Milliman reported a 7 basis points increase in the corporate discount rate to 5.57% at April 30th from 5.50% at the end of March in their corporate update. That movement up in rates would have reduced the present value (PV) of those future benefit promises causing the funded ratio to rise some more.

You can find the complete report here.