Industry News

On April 2, 2026, the National Conference of Public Employee Retirement Systems (NCPERS) released the results of its NCPERS 2026 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 2025 reached an average funding ratio of 79.2%, compared with 81.4% for the same time period in 2024.
• Importantly, systems that received their full actuarially determined contribution reported funding ratios that were an average of 6.6 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 2025, average one-year investment returns reached 10.2% (net of fees) and ten-year returns of 7.5%.
• Discount rates are slowly declining with the average of 6.67% in the first half of 2025, down from 6.77% for the same period in 2024, which may indicate that the assumptions of the responding systems are becoming more conservative.
• Amortization periods averaged 18.6 years and an increasing number of systems (over 24%) are using layered amortization approaches.
• 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, about 72% use a 5-year smoothing period.
• Approximately 71% of the reporting funds that offered a Cost-of-Living Adjustment (COLA) for members in the most recent fiscal year paid a median COLA of about 2.9%.
• Although pension systems are taking a cautious approach for Artificial Intelligence (AI), over 35% of respondents report using AI for at least one purpose such as fraud detection, actuarial forecasting, data modeling and participant communication.
• The top priorities for 2026 include improving cybersecurity and fraud prevention systems, sustaining target funding levels, and modernizing pension administration systems. 

The survey includes data from 149 public pension systems with about 18.1 million active and retired members. Of those systems, about 86% were covered by a defined benefit plan while about 13% included a hybrid or defined contribution plan. The defined benefit plan assets were reported to range from under $1 billion (27%) to $50 billion or more (29.8%). 

The report is available here.