Pension Funded Status Down Slightly in June, Says Study
Pension plans’ funded status slipped slightly in June, with mixed results for assets and slight growth in liabilities, says a recent report
Consultant firm October Three says that for the plans it studies, a diversified stock portfolio grew only slightly in June — less than 1% — and that bonds grew by just a little more. Pension liabilities grew by comparable amounts.
The report further says that despite June’s rather anemic results, overall the plans’ performance is positive for the first half of 2017, with growth in assets greater than that of liabilities. The traditional plan it tracks lost approximately 1% in June but is still ahead by nearly 2% for the year so far, while the cash balance plan it monitors slipped a little bit in June but is 0.5% ahead for the first half of 2017.
October Three bases its analyses on the performance of two model pension plans: a traditional plan and a cash balance plan whose investments are largely in corporate and long-duration bonds. Their performance is measured using actual stock market and bond performance, as well as interest rate changes.