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Pension Funding Index: Corporate pension funded status improves by $7 billion in November
By: Milliman | December, 2017

The funded status for the Milliman 100 plans has shown improvements in each of the last three months with a total gain of $41 billion

The funded status of the 100 largest corporate defined benefit pension plans improved by $7 billion during November as measured by the Milliman 100 Pension Funding Index (PFI). The deficit fell to $258 billion primarily due to a robust investment gain of 0.82% during November. Pension plan liabilities remained stagnant during November as the benchmark corporate bond interest rates used to value those liabilities remained flat. As of November 30, the funded ratio increased to 85.2%, up from 84.8% at the end of October. The funded status has improved by $41 billion since August 31, making the last three months the strongest performing period of 2017.

The market value of assets rose by $7 billion as a result of November’s investment gain of 0.82%. The Milliman 100 PFI asset value increased to $1.484 trillion at the end of November. Cumulative investment gains in 2017 are 10.53% year-to-date. By comparison, the 2017 Milliman Pension Funding Study reported that the monthly median expected investment return during 2016 was 0.57% (7.0% annualized).

The projected benefit obligation (PBO), or pension liabilities, remained unchanged at $1.742 trillion at the end of November. There was a meager increase in the monthly discount rate of one basis point, settling in at 3.67% for November, from 3.66% for October.

http://www.milliman.com/Solutions/Products/Pension-Funding-Index/

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