US. Here’s How Badly the Market Crash Has Hurt Pension Funds
Public pension plans in the U.S. saw significant losses in 2022 as interest rates rose and stock markets tanked.
In its annual state of pensions report, Equable Institute, a non-profit that provides public pension research and information, found that in the fiscal year ending in June 2022, the aggregate funded ratio of statewide and municipal public pensions plans dropped by 6.9 percentage points — a loss of about half of 2021’s gains. In fact, the report said this drop is the largest single-year decline in the funded ratio since the 2008 financial crisis.
“There was about a trillion-dollar gain in fiscal year 2021, and we’re looking at about a $300 billion loss in fiscal year 2022,” Anthony Randazzo, executive director at Equable Institute, told Institutional Investor. “That stood out to us as being rather intense.”
Equable estimated that the average return for 2022 will be a loss of 10.4 percent. According to the report, this will be the first negative average for public pension plan returns since 2009.
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