Corporate funding ratios get a boost in January – 3 reports
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Funding ratios for corporate pension plans inched up in January, according to reports from Wilshire Consulting, Mercer and Northern Trust Asset Management.
Wilshire s monthly report noted that the aggregate funding ratio for U.S. corporate plans increased by 1.7 percentage points to 88.5% as of Jan. 31 from Dec. 31. The monthly change in funding resulted from a 3.5 percentage-point decrease in liability values partially offset by a 1.6 percentage-point decrease in asset values. January s increase in funded ratio was primarily driven by the decrease in liability values as corporate bond yields used to value corporate pension liabilities increased by over 20 basis points, said Ned McGuire, managing director and a member of the investment management and research group of Wilshire Associates, in a news release announcing the results. January s asset value decrease snapped two consecutive monthly increases a
Roller-coaster year leaves corporate funding where it started
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The funded status of the largest corporate pension plans in the U.S. remained unchanged from last year s funding level after declining interest rates offset the gains made in the stock and bond markets.
Data from Willis Towers Watson show that the aggregate pension funded status was estimated to be 87% at the end of 2020, unchanged from 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 2019. Pension obligations increased 5% to an estimated $1.83 trillion in 2020 from $1.75 trillion in 2019.
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