Pension Plan Funded Status Improves in July

By ASPPA Net Staff • August 17, 2017 • 0 Comments

The funded status of U.S. corporate pension plans improved in July, according to assessments by three financial services firms.


Milliman, Wilshire Consulting and Legal & General Investment Management America (LGIMA) all report that funded status overall inched up slightly from June to July. But that is a bit misleading, since even a small increase really spells an improvement of billions of dollars.

To wit: Milliman says that the funded status of the 100 largest corporate pension plans improved from 83.5% in June to 83.7% in July. But that 0.2% improvement translates to a $4 billion increase in one month. Wilshire showed similar results, according to Pensions & Investments, reporting that the aggregate funding ratio for S&P 500 companies’ pension plans improved by 1% in July to 84.3%. And LGIMA says that funded status improved to 83.9%, Pensions & Investments says.

Drilling down to greater specifics, all three also show similar results regarding asset values and liabilities.

   MIlliman   Wilshire    LGIMA
Change in Asset Values, June to July 2017   +0.93%  +1.3%  +1.9%
 Change in Liabilities, June to July 2017  +0.2%  +0.3%  +0.6%

Milliman and Wilshire also report that private employer pension plans’ funded status has improved over a longer term. Milliman says that funded percentages have improved overall since Jan. 1 by 0.2%, and by 6.7% from Aug. 1, 2016-July 31, 2017. For its part, Wilshire says that the aggregate funded ratio of the pension plans of the S&P 500 has improved by 2.4% since Jan. 1.

Zorast Wadia, co-author of the Milliman 100 PFI, in a press release attributed the slight movement in funded rates to relatively strong market returns and persistently low interest rates. He added that they are seeing a number of plans “make additional contributions with an eye towards shoring up funded status in the future.”