Pension Funding Up in January
January opened with the ball dropping, but that may be about all that fell last month — at least as far as pension plan funding was concerned.
In its regular analysis
of how pension funds are faring, October Three applies current conditions and circumstances to two model pension plans: a traditional plan and a cash balance plan. It reports that the rising fortunes of the stock market and rising interest rates resulted in January “being the best month for pension finance in almost three years.”
In its analysis, October Three says that the funded ratio of the traditional model plan gained 5%, and the cash balance model plan gained more than 1%.
And the good news did not stop at funded ratios, says October Three. Pension liabilities dropped by approximately 2%, an improvement the firm attributes to improvement in corporate bond yields in January.