Pension Funding Index September 2017

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By Zorast Wadia, Charles J. Clark | 12 September 2017

In August, the funded status of the 100 largest defined benefit pension plans decreased by $17 billion as measured by the Milliman 100 Pension Funding Index (PFI). The funded status swelled to $298 billion from $281 billion at the end of July due to a decrease in the benchmark corporate bond interest rates used to value pension liabilities. As of August 31, the funded ratio fell to 83.0%, down from 83.8% at the end of July.

The projected benefit obligation increased by $25 billion during August, raising the Milliman 100 PFI liability value to $1.757 trillion from $1.732 trillion at the end of July.

Over the last 12 months (September 2016-August 2017), the cumulative asset return for these pensions has been 7.53% and the Milliman 100 PFI funded status deficit has improved by $126 billion. Discount rates experienced an increase over the last 12 months moving from 3.32% as of August 31, 2016, to 3.60% a year later.