Milliman, Inc., a premier global consulting and actuarial firm, released a special April edition of its Public Pension Funding Index (PPFI), in light of the COVID-19 pandemic and resulting market volatility. Milliman's PPFI consists of the nation's 100 largest public defined benefit pension plans.

Our latest analysis shows funding for public pensions in April rebounded significantly from the first quarter of 2020, with an aggregate 5.92% investment return for the month – welcome news after Q1's dismal -10.81% asset performance. April's market gains led to a $200 billion funding improvement for the PPFI, enabling public pensions to recover half of their losses from the previous two months. We estimate that the aggregate deficit shrank from $1.819 trillion at the end of March 2020 to $1.619 trillion at the end of April. The resulting funded ratio climbed significantly, from 66.0% at the end of March to 69.8% as of April 30.

"April was a surprisingly positive month for public pensions, with many sectors of the market showing some signs of recovery," said Becky Sielman, author of the Milliman 100 Public Pension Funding Index. "As economic fallout continues from the COVID-19 pandemic, plan sponsors will likely be keeping an eye on asset classes with delayed performance reporting, such as private equity, and market sectors that may be more vulnerable as the economy restarts."