The funded status deficit of the 100 largest corporate defined benefit pension plans increased by $10 billion during May as measured by the Milliman 100 Pension Funding Index (PFI). The $268 billion deficit at the end of May is primarily due to a drop in the benchmark corporate bond interest rates used to value pension liabilities. Investment gains helped to partially offset the full extent of liability increases in May.

May’s funded status decline was quite similar to that in April, with lower interest rates increasing liabilities to a level that could not be offset by rising assets. May was the fifth consecutive month of interest rate decreases. Fortunately, the strong year-to-date asset performance has mitigated further erosion.