The 2022 fiscal year investment results for state pension plans 
Photo 185101073 © Engdao Wichitpunya | Dreamstime.com

Data Visualization

The 2022 fiscal year investment results for state pension plans 

Overall, the 2022 median investment return for state pension systems is -5.4%, which is far below the median long-term assumed rate of return for 2022 of 7% for the pension plans.

Government pension plans depend on annual investment results to help generate the funding needed to pay for the retirement benefits that have been promised to teachers, public safety, and other public workers. Since investment returns contribute to long-term public pension solvency trends, interested parties keep a close eye on the annual results of these pension funds to see how they are performing compared to their own assumed rates of return. 

Reason Foundation’s list of public pension investment return results includes all state pension plans that have reported their fiscal year-end results as of this writing. The distribution of 2022 investment returns shows a significant range of results between all reporting state pension plans.

The Oklahoma Public Employees Retirement System reported a -14.5% return for its 2022 fiscal year, which is the lowest return rate reported thus far.

The New York State and Local Retirement System (NYSLRS) and the New York Police and Fire Retirement System (PFRS) reported 9.5% returns—the highest return rate in the nation for fiscal 2022.

Overall, the 2022 median return for state pension systems is -5.4%, which is far below the median long-term assumed rate of return for 2022 of 7% for the plans included in this list. The results for the 2022 fiscal year so far are well below pension plans’ return assumptions, meaning most state pension plans will see growth in their unfunded liabilities and a worsening of their reported funding levels.

More investment results will be added as state pension plans report their fiscal year results.

With each plan achieving different investment returns, the funding impact will also be different for each state pension.

Methodology

'Estimated Investment Gain/(Loss)' is calculated by taking the plan's FY 2020-21 Market Value of Assets and multiplying it by the difference between '2022 Return' and 'Assumed Rate of Return.' Estimated values are meant to approximate total amounts of investment loss that plans would fully & directly recognize this year due to FY 2021-22 return deviating from the assumption (i.e., not accounting for the smoothing mechanism). Investment returns shown are Net of Fees, if not stated otherwise. ‘Deviation from Assumed Rate of Return’ shows the difference between ‘2022 Return’ and ‘Assumed Rate of Return.' Positive returns are highlighted in light blue, and negative in orange. The distribution of the 2022 investment returns chart is based on the `normalized` probability density function, with all probabilities (i.e., all points on a line graph) summing up to 100%.  

Stay in Touch with Our Pension Experts

Reason Foundation’s Pension Integrity Project has helped policymakers in states like Arizona, Colorado, Michigan, and Montana implement substantive pension reforms. Our monthly newsletter highlights the latest actuarial analysis and policy insights from our team.