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2018 Corporate Pension Funding Study

ByCharles Clark, Alan Perry, and Zorast Wadia
18 April 2018
During 2017, the private single-employer defined benefit plans of the Milliman 100 companies made significant funding improvements. The Milliman 100 funded ratio settled at 86.0%, an improvement from the year-end 2016 funded ratio of 81.1%. The funding deficit dropped by a noteworthy $75 billion, ending the year at $252 billion. Corporate plan sponsors made the strategic decision in fiscal year 2017 to contribute $62 billion to their plans, pushing 2017’s total assets to a record $1.55 trillion. This year’s contributions represent a 45.0% increase from the $42.6 billion contributed in 2016, and are tied with 2012 for the highest amount contributed to the Milliman 100. Soaring global equity markets contributed to very strong investment returns in 2017 with the average plan earning about 12.7%. The discount rate declined during 2017 to end the year at 3.60%, down 37 basis points from the 3.97% rate a year earlier. As a result, the projected benefit obligation of the Milliman 100 plans increased to an all-time high of $1.80 trillion (an $82 billion increase since the end of 2016).

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Charles Clark

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