In August, the funded status deficit of the 100 largest corporate defined benefit pension plans increased by $87 billion as measured by the Milliman 100 Pension Funding Index (PFI). The funded status deficit ballooned to $306 billion from $219 billion at the end of July due to a decrease in the benchmark corporate bond interest rates used to value pension liabilities. The funded status decline was partially offset by strong investment returns, in particular fixed income asset holdings during August. As of August 31, the funded ratio fell to 83.8%, down from 87.7% at the end of July.

The projected benefit obligation increased by a whopping $104 billion during August, raising the Milliman 100 PFI liability value to $1.887 trillion from $1.783 trillion at the end of July. August’s discount rate is the lowest recorded in the 19-year history of the Milliman 100 PFI, which has never previously reported a discount rate below 3.00%.

August’s 1.33% investment return raised the Milliman 100 PFI asset value by $17 billion to $1.581 trillion.