Public pension funding levels are up and costs to manage plans are down, according to a recent study by the National Conference on Public Employee Retirement Systems (NCPERS).
The report, released in November 2015, shows that, nationally, public pension funding levels are at 74.1%, up from 71.5% last year. NYSTRS, one of the best-funded public pension plans in the nation, is 92.9% funded.
Among the nearly 200 public retirement systems surveyed, the average cost to administer the plans was 60 cents for every $100 managed, down from 61.1 cents a year earlier. NYSTRS manages its plan for about 24 cents per $100.
By comparison, the NCPERS study found most private sector equity and hybrid funds have an average cost of between 70-78 cents for every $100 managed.
The NCPERS findings on plan costs are consistent with the results of a December 2015 study published by the Center for Retirement Research at Boston College. (See “Study Finds DBs Outperform DCs” under Headlines at NYSTRS.org).
According to the NCPERS report, investment income accounts for three of every four dollars in public pension system revenue. In NYSTRS’ case, investments generate approximately 85% of total income.
The 2015 NCPERS Public Retirement Study looked at 179 state and local government pension funds responsible for more than $2 trillion in assets. The survey is conducted annually with Cobalt Community Research. The complete study can be seen on the NCPERS website.