In May, the funded status of the 100 largest corporate defined benefit pension plans worsened by $2 billion as measured by the Milliman 100 Pension Funding Index (PFI). The deficit rose to $141 billion from $139 billion at the end of April due to a decrease in the benchmark corporate bond interest rates used to value pension liabilities. As of May 31, the funded ratio was unchanged from 91.6% seen at the end of April.
May’s 0.73% investment gain increased Milliman 100 PFI asset values by $7 billion to $1.531 trillion at the end of May.
The Milliman 100 PFI projected benefit obligation increased by $9 billion during May to $1.672 trillion. The change resulted from a decrease of four basis points in the monthly discount rate to 3.99% for May from 4.03% in April.
Over the last 12 months (June 2017-May 2018), the cumulative asset gain for these pensions has been 5.79% and the Milliman 100 PFI funded status deficit has improved by $116 billion. The primary reason for the increase in the funded status deficit has been a moderate uptick in discount rates over the past 12 months.