Pension liabilities of the 100 largest corporate defined benefit pension plans fell by $30 billion in September while the corresponding pension assets improved by $15 billion, lowering the Milliman 100 PFI pension deficit to $453 billion and increasing the funded ratio to 74.5%. The September 30, 2012, funded ratio still lags its December 31, 2011, value of 78.7%.
September’s funded status improvement was fueled by an increase in the corporate bond interest rates that are the benchmarks used to value pension liabilities. September marks the second consecutive month of discount rate increases after the dismal performance between March and July, when the deficit ballooned in response to declining discount rates. As of September 30, the funded ratio climbed to 74.5%, up from 72.4% at the end of August.