Pension Funding Index July 2017

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By Charles J. Clark, Zorast Wadia | 10 July 2017

In June, the funded status of the 100 largest corporate defined benefit plans decreased by $4 billion as measured by the Milliman 100 Pension Funding Index (PFI). The deficit grew to $285 billion from $281 billion at the end of May. Poor investment returns during June contributed to the funded status decline. As of June 30, the funded ratio fell to 83.5%, down from 83.7% at the end of May.

June’s 0.35% investment return left Milliman 100 PFI asset value flat at $1.443 trillion.

The projected benefit obligation increased by $4 billion during June, raising the Milliman 100 PFI value to $1.728 trillion. The change resulted from a decrease of two basis points in the monthly discount rate to 3.74% for June from 3.76% in May.

Over the last 12 months (July 2016-June 2017), the cumulative asset return for these pensions has been 8.17% and the Milliman 100 PFI funded status deficit has improved by $138 billion. The primary reason for the increase in the funded status has been investment returns above expectations over the past 12 months.