Pension Funding Index July 2019

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By Charles J. Clark, Zorast Wadia | 08 July 2019

In June, the funded status of the 100 largest corporate defined benefit pension plans increased by $1 billion as measured by the Milliman 100 Pension Funding Index (PFI). The deficit changed to $212 billion from $213 billion at the end of May primarily due to robust asset gains in June. As of June 30, the funded ratio inched upward to 88.0% from 87.7% at the end of May.

June’s solid 2.82% investment gain raised the Milliman 100 PFI asset value by $38 billion to $1.556 trillion, up from $1.518 trillion at the end of May.

The PFI projected benefit obligation increased by nearly the same dollar amount as the asset gain in June. Plan liabilities rose by $37 billion for the month, increasing the Milliman 100 PFI value to $1.768 trillion.

For the quarter ending June 30, 2019, assets increased by $33 billion and plan liabilities increased by $170 billion. While investment returns exceeded expectations during the second quarter, discount rates- which fell by 33 basis points- had a stronger impact on funded status.