WASHINGTON -- The funding ratio of state pension plans dropped four percentage points to 69% in fiscal 2016, Wilshire Consulting said Monday.
It was the first time since 2010 that funding levels have dipped below 70%.
Two years earlier, in 2014, state pension plans were 77% funded on average. That dropped to 73% in 2015 before falling to 69% in the most recent fiscal year.
Thirteen of the plans were less than 50% funded in 2016, according to the report, which does not identify them by state.
Only three plans were funded 100% or more.
“We see over the last two studies the change in the market value of assets has been flat,’’ said Ned McGuire, who authored the report for the institutional investment advisory and business unit of Wilshire Associates Inc.
The big change came from increased liabilities, he said.
In 2016 the average state pension portfolio had 64.8% allocated to equities, including real estate and private equity, a 24.7% allocated to fixed income and a 10.5% allocated to other non-equity assets, the report said.
The average 2016 equity stake was 3.8 percentage points lower than 10 years earlier, when the average equity position stood at 68.6%.
The shift occurred as pension plans moved more of their investments into other growth areas such as real estate and private equity.