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Funded Ratios for Private-Sector Pensions Improve in September

There was some good news for U.S. corporate pension plans in a recent report about their overall funded ratio. Wilshire Consulting, Inc. says that in September, the aggregate private-sector pension plan funded ratio rose by almost one percentage point.

The aggregate funded ratio in September was 76.9%. September’s results were the first rise in Wilshire’s month-to-month assessments since a 0.5-percentage point rise from June to July. Wilshire attributes the rise to the fact that while asset values fell, liability values dropped more.

In a press release, Ned McGuire, vice president and a member of Wilshire Consulting’s Pension Risk Solutions Group, elaborated on the results. He said that asset values dropped due to a combination of benefit payments and overall asset returns, which he described as “flat.” McGuire said that liability values dropped because of an improvement in corporate bond yields.

The small rise did not reset the dial for the year overall. Wilshire reports that the aggregate funded ratio for private-sector pension plans in 2016 has been between 75.5% and 78.3%. It remains lower than where the ratio was at the start of the year; worse, it’s a full four percentage points lower than the aggregate funded ratio in September one year before.