It’s well-known that public pension funds took a major hit during the financial crisis. We’ve written before about the steep drop in funding levels from 2008 – 2009 when the economy was crashing due to Wall Street greed and incompetence. The story that’s less well-known is that the majority of public pension funds continue to recover from the depths of the recession, as a recent report from the National Conference on Public Employee Retirement Systems (NCPERS) details.

NCPERS is a trade association of public pension plan administrators, trustees, and investment professionals. These are the folks who actually manage public pension funds and administer benefits to retirees. Each year NCPERS surveys its members about various aspects of public pension plans from funding level to investment performance to cost effectiveness. The recently released 2016 survey documents healthy pension funds that provide a secure retirement to firefighters, teachers, librarians, and other public employees.

When it comes to funding status, a key metric for lawmakers and the general public, pension funds continue to improve each year. The average funded level of the surveyed plans has increased from 71.5 percent in 2014 to 74.1 percent in 2015 to 76.2 percent in 2016. These plans have managed to improve their funded status each year, despite an investment environment that remains challenging.

Speaking of investing, public pension funds continue to earn strong returns. According to the NCPERS survey, when looking at returns from the past 3 years (8.6%), 5 years (8.3%), and 20 years (7.9%), the pension funds have achieved returns close to or exceeding 8 percent. When looking at the past 10 years, the investment rate of return was 6.2 percent, but that 10 year period includes the recession. While funds continue to achieve these strong rates of return, many are lowering their actuarial assumed rate of return to account for continued weakness in the market.

Finally, public pensions continue to be a cost-effective way to provide retirement security to millions of hard-working public employees. Pension funds have lowered their costs for administering their funds and paying investment managers. Not only have they lowered their own costs compared to previous years, but their costs are significantly lower than most mutual funds.

This report is confirmation of what we already know: public pensions work. They are a cost-effective way to provide retirement security to working families. While pension funds did take a hit during the recession, they continue to recover each year through smart investing and cost-cutting measures.