Corporate pension funding up for month, quarter – 3 reports
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Funding ratios for corporate pension plans increased in March on a monthly and quarterly basis, according to reports from Wilshire Associates, Legal & General Investment Management America and Mercer.
Wilshire s monthly report noted that the aggregate funding ratio for U.S. corporate plans increased by 2.4 percentage points to 92.5% as of March 31 from Feb. 28, and by 5.7 percentage points from Dec. 31. The monthly change in funding resulted from a 3.4-percentage-point decrease in liability values partially offset by a 0.7-percentage-point-decrease in asset values. March s increase in funded ratio was primarily driven by the continued decrease in liability values as corporate bond yields used to value corporate pension liabilities are estimated to have increased by over 20 basis points driven, by the increase in Treasury yields, said Ned McGuire, managing director and a member of the investment managemen
Strong End to 2020 Puts DB Plan Funded Status Back to Where It Started the Year
Defined benefit plans that use an LDI strategy faced less volatility over the year, and funded status improvements were helped by gains in risk assets.
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The funded status of the nation’s largest corporate pension plans started and finished last year at the same level, as declining interest rates caused pension obligations to grow, offsetting gains from investments in equities and bonds, according to an analysis by Willis Towers Watson.
Willis Towers Watson examined pension plan data for 366 Fortune 1000 companies that sponsor U.S. defined benefit (DB) plans and have a December fiscal-year-end date. Results indicate that the aggregate pension funded status is estimated to be 87% at the end of 2020, unchanged from 87% at the end of 2019. The analysis also found the pension deficit is projected to be $233 billion at the end of 2020, slightly higher than the $230 billion deficit at the end of