The funded status deficit of the 100 largest corporate defined benefit
pension plans increased by $10 billion during May as measured
by the Milliman 100 Pension Funding Index (PFI). The $268 billion
deficit at the end of May is primarily due to a drop in the benchmark
corporate bond interest rates used to value pension liabilities.
Investment gains helped to partially offset the full extent of liability
increases in May.
May’s funded status decline was quite similar to that in April, with
lower interest rates increasing liabilities to a level that could not
be offset by rising assets. May was the fifth consecutive month of
interest rate decreases. Fortunately, the strong year-to-date asset
performance has mitigated further erosion.