In contrast to the relatively unabated rise of equity markets Q4 2020, concerns around the inflationary impact of quantitative easing and pace of economic recovery contributed to volatility of equity returns in Q1 2021. The S&P 500 returned 6.2% for the quarter, compared to 12.1% in Q4 2020.
We estimate that in aggregate, public pension assets returned approximately 3% in Q1 2021, resulting in the estimated aggregate funded status of our sample of plans rising 1% quarter over quarter and year to date through March 2021.
The onset of the COVID-19 pandemic resulted in broad declines across many asset classes. We estimate that as equity markets reached their lows in Q1 2020, a majority of plans in our sample may have experienced funded status declines of 10.1 - 12.5%.