September Rough for Private, Public Defined Benefit Plans

By ASPPA Net Staff • October 09, 2015 • 0 Comments
DB plans had a tough month in September. Recent reports indicate that both private and public plans’ funded status declined.

Corporate plans’ funded ratio dropped to 81.8% in September according to BNY Mellon Fiduciary Solutions, BenefitsPro reports. That drop was primarily fueled by losses in the second half of September, BNY says.

BNY was not alone in its assessment: Milliman also reports a $28 billion drop in the funded status of the 100 largest corporate DB plans, and a funded ratio of 81.7%. And the September drop is not all — September’s funded ratio was 1.6 percentage points lower than that of August, and the September loss is part of a $66 billion drop in private plans’ funded status, Milliman says.

Milliman adds that corporate pension plans’ liabilities grew from $1.699 trillion at the end of August to $1.708 trillion by the end of September.
Public DB plans declined too, BNY says, by many measures. It says their assets fell by 2.2% and they are 9.4% and 10.1% behind on their year-to-date and one-year return targets, respectively.

This indicates a continuation of a trend the U.S. Census Bureau identified recently, when it released a report that the assets of the 100 largest U.S. public employee pension systems fell slightly from the first quarter of 2015 to the second.