Pension Funding Index December 2014

  • Print
  • Connect
  • Email
  • Facebook
  • Twitter
  • LinkedIn
  • Google+
By John W. Ehrhardt, Zorast Wadia | 04 December 2014

The funded status of the 100 largest corporate defined pension plans fell by $8 billion during November as measured by the Milliman 100 Pension Funding Index (PFI). The deficit widened to $271 billion from $263 billion at the end of October primarily due to another decrease in the benchmark corporate bond interest rates used to value pension liabilities. As of November 30, the funded ratio declined to 84.6% from 84.8% at the end of October.

Discount rate declines continue to be the lead story for 2014 as rates have dropped by 79 basis points so far from year-end 2013. Year to date, pension liabilities have increased by 14.4% or $167 billion, resulting in a decline in the Milliman 100 PFI funded ratio. The market value of assets improved by $18 billion as a result of November’s investment gain of 1.49%. The Milliman 100 PFI asset value increased to $1.485 trillion.