Funded ratio for 100 largest U.S. corporate pensions hits 10-year high in SeptemberStaff Writer | October 13, 2018
Milliman released the results of its latest Pension Funding Index (PFI), which analyzes the 100 largest U.S. corporate pension plans.
America From August 31 to September 30, the monthly discount rate rose 13 basis points
From August 31 to September 30, the monthly discount rate rose 13 basis points, climbing from 4.05% to 4.18%.
As a result, the projected benefit obligation (PBO) for these plans decreased by $27 billion, but was offset by a $6 billion decrease due to investment losses. As of September 30, the funding ratio for the Milliman 100 PFI was at 94.5%, up from 93.3% the previous month.
Looking forward, under an optimistic forecast with rising interest rates (reaching 4.33% by the end of 2018 and 4.93% by the end of 2019) and asset gains (10.8% annual returns), the funded ratio would climb to 98% by the end of 2018 and 114% by the end of 2019.
Under a pessimistic forecast (4.03% discount rate at the end of 2018 and 3.43% by the end of 2019 and 2.8% annual returns), the funded ratio would decline to 93% by the end of 2018 and 85% by the end of 2019. ■