The estimated funding ratio of the 100 largest public defined benefit plans in the U.S. inched down to 78.4% at the end of May from 78.6% at the end of April, according to the latest Milliman 100 Public Pension Funding index released Wednesday.

The “relatively stagnant market” of May provided a “reprieve” for these plans after the volatility experienced between February and April this year, Milliman said in a news release. The funding ratio was as high as 85.5% at the end of the fourth quarter of 2021.

In addition, the deficit between the estimated assets and liabilities widened by a “correspondingly modest amount,” to $1.259 trillion at the end of May from $1.243 trillion at the end of April, the release said.

The index’s asset value remained “essentially unchanged,” inching down to $4.566 trillion at the end of May from $4.567 trillion at the end of April. The pension funds actually gained a bit of market value, about $7 billion, but had “very slightly higher” net negative cash flow of about $8 billion, Milliman said.

Milliman estimated the pension funds had aggregate investment returns of 0.16% in the month of May, with individual plans’ returns ranging from -0.72% to 1.8%.

“In fact, in May investment returns helped these plans gain a small amount of market value, but the net negative cash flow from benefits being paid basically zeroed that out,” said Becky A. Sielman, author of the index and a principal and consulting actuary at Milliman, in the release.

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