Wilshire's report shows that the increase in aggregate TPL largely can be traced to annual benefit accruals and interest cost. In particular, the increase due to interest cost was an estimated 5.95%, while continued annual benefit accruals – or service cost – grew the TPL by 1.71%.

The robust growth in aggregate assets, on the other hand, largely originated from positive investment returns and contributions. Fiscal year 2021 was the fifth straight fiscal year to experience an increase in assets. Contributions built the asset value by 5.07% for the year, including 18% coming from plan participants, while the 23.7% increase due to investment income was the largest percent gain on record. This helped counter benefit payments, which decreased asset values by an estimated 6.6%.

Overall, the report shows that the distribution of city and county retirement plans with funded ratios below 70% plummeted from 41% to 11% between fiscal year 2020 and fiscal year 2021. Meanwhile, the distribution of plans with funded ratios over 80% grew from 37% to 64%. Dating back a decade to 2011, Wilshire's survey shows that aggregate assets grew 95%, and aggregate liability grew 79%.

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Discount rates, which represent the long-term rate of return on invested plan assets used to calculate liability values, have "trended lower" in recent years, according to the report. Wilshire showed that discount rates in fiscal year 2021 ranged from 3.46% to 7.50% with a median of 7%, which matches last year's median discount rate.

The survey also drills into the aggregate asset allocation of the systems surveyed. The highest shares of aggregate assets are distributed among Total Fixed Income (27.7%), U.S. Equity (26.4%) and Non-U.S. Equity (17.0%). Other categories include Private Equity (8.9%), Real Estate (8.6%) and Hedge Funds (3.1%), along with Other (8.3%), which refers to any other asset class, such as Cash and Commodities.

In the past 10 years, there have been some notable changes in aggregate asset allocation. Among the more sizable shifts, U.S. Equity has fallen 6.1% in its exposure and Non-U.S. Equity has dropped 1.9%, while Private Equity has climbed 4.8% and Real Estate has increased 2.3%. Changes have been particularly stark in the past five years for U.S. Equity (minus 3.5%), Non-U.S. Equity (minus 2.5%), Private Equity (plus 3.9%) and Total Fixed Income (plus 3.3%).

In its report, Wilshire included its current long-term return and risk assumptions, noting that its 10-year expected return for many asset classes are either near or at their lowest point due to low interest rates. Expected 10-year return percentages range from Fixed Income (2.0%) and Hedge Funds (3.8%) to Real Estate (5.9%) and Private Equity (8.1%).

Although Wilshire's report focused on fiscal year 2021, the company shared that it estimated an aggregate funded ratio of just 73.3% as of June 30, 2022. Wilshire said the sharp drop demonstrates the impact of global market fluctuations due to inflation, interest rate hikes and Russia's invasion of Ukraine.