Pension Funded Status Improved in September

By ASPPA Net Staff • October 12, 2017 • 0 Comments

Corporate pension plans’ funded status improved in September, according to two recent studies. One of them, in fact, reports that they showed their strongest monthly gains of the year last month. This is a reversal of the results in August, when both showed a slight worsening of corporate plans’ funded status. 

The estimated aggregate funding of the Standard & Poors (S&P) 1500 hit 83%, Mercer reports, an increase of one percentage point over the August figure. In raw figures, the aggregate corporate pension plan deficit for the S&P 1500 dropped by $40 billion, to $392 billion. Mercer attributes the improvement to increasing discount rates and positive equity markets. 

Milliman reported similar results. It says that the funded status of the 100 largest U.S. corporate pension plans increased by 1.3% from 83% to 84.3%. In dollars, says Milliman, that translates to an improvement in September of $26 billion. Like Mercer, it says that part of the explanation is improvement in discount rates; Milliman says that they increased by nine basis points. Milliman says that the improvement also was due in part to market value gains.