Industry News

On February 24, 2025, the National Conference of Public Employee Retirement Systems (NCPERS) released the results of its NCPERS 2025 Public Retirement Systems Study: Trends in Fiscal, Operational, and Business Practices. The annual comprehensive survey provides information on investment experience, actuarial assumptions, plan administration and operations, trends, innovations and best practices.  ​

Some of the key findings include:   

• Systems with fiscal year-end dates in the first half of 2024 reached an average funding ratio of 83.1%.
• Importantly, systems that received their full actuarially determined contribution reported funding ratios that were an average of 20 percentage points higher than those that do not receive the full contribution.
• Of the reporting pension systems with a fiscal year-end date in the first half of 2024, investment returns reached an average of 9.47%
• Discount rates are slowly declining from an average of 7.13% in the first half of 2021 to 6.67% in the first half of 2024 which may indicate that the assumptions of the responding systems are becoming more conservative.
• Most systems include an investment smoothing period to recognize investment gains and losses over multiple years to help reduce volatility in funding ratios. Of the systems that use smoothing methods, 75% use a 5-year smoothing period.
• About 75% of the reporting funds that offered a cost-of-living adjustment (COLA) for members in the most recent fiscal year averaged 2.81%. However, the median and most common COLA paid by 51% of those with COLAs was 3.0%.
• The top priorities for 2025 include improving cybersecurity and fraud prevention systems, sustaining target funding levels, and updating and acquiring a pension administration system.

The survey included 201 state and local government pension funds with more than 17 million active and retired members and total assets exceeding $3 trillion. The 2025 study was conducted in partnership with Greenwald Research.

The report is available here.