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Pension Funding Index: Funded status improves in July by $4 billion
By Milliman | August 2017

The Milliman 100 PFI increases to 83.7% as solid investment gains overcome discount rate declines (again!)

The funded status of the 100 largest corporate defined benefit pension plans increased by $4 billion during July as measured by the Milliman 100 Pension Funding Index (PFI). The funded status deficit declined to $282 billion from $286 billion at the end of June due to strong July investment gains. The funded status improvement came as the benchmark corporate bond interest rates used to value pension liabilities continue a decline that began in April. As of July 31, the funded ratio rose to 83.7%, up from 83.5% at the end of June. The funded ratio has been teetering between 83% and 84% over the first seven months of the year.

July’s 0.93% investment gain raised the Milliman 100 PFI asset value to $1.450 trillion from $1.442 trillion at the end of June. The cumulative 2017 investment gain is a healthy 6.50%. By comparison, the 2017 Milliman Pension Funding Study reported that the monthly median expected investment gain during 2016 was 0.57% (7.0% annualized). As Congress has adjourned for August, we continue to wait for any details that could emerge for “tax reform” and how that could affect the funded ratio of these large DB plans.

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

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