Pension Funding Index December 2019

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By Charles J. Clark, Zorast Wadia | 05 December 2019

In November, the funded status of the 100 largest corporate defined benefit pension plans increased by $15 billion as measured by the Milliman 100 Pension Funding Index (PFI). The deficit lessened to $243 billion primarily due to investment gains. Benchmark corporate bond interest rates used to value pension liabilities were flat in November as they were in October. As of November 30, the funded ratio increased to 86.8% from 86.1% reported at the end of October. Pension funding has improved by $64 billion over the past three months primarily due to positive market performance.

The market value of assets improved by $11 billion as a result of November’s 0.93% investment gain. The Milliman 100 PFI asset value increased to $1.604 trillion from $1.593 trillion at the end of October.

The projected benefit obligation decreased by $4 billion during November, lowering the Milliman 100 PFI value to $1.847 trillion from $1.851 trillion at the end of October. The change was the result of a one basis point increase in the monthly discount rate, to 3.09% for November from 3.08% in October.

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