U.S. Corporate Pension Plans Funding Status – April 2024

Wilshire estimates 1.1 percentage point increase in aggregate funded ratio for U.S. corporate pension plans in April.

Santa Monica, Calif., May 7, 2024 – The aggregate funded ratio for U.S. corporate pension plans increased by an estimated 1.1 percentage points in April, ending the month at 110.8%, according to Wilshire, a diversified global financial services firm. Wilshire assists in providing a suite of OCIO and advisory services to some of the nation’s largest retirement plans which help fund the retirement of millions of Americans.

This month’s change in funded ratio resulted from a 5.2% decrease in liability value partially offset by a 4.2% decrease in asset value. The aggregate funded ratio is estimated to have increased by 5.8 and 10.3 percentage points year to date and over the trailing twelve months, respectively.

"April’s funded status increase resulted from the increase in Treasury yields, which led to the largest monthly decline in liability values since September 2022. Corporate bond yields, used to value corporate pension liabilities, are estimated to have increased by over 45 basis points," commented Ned McGuire, Managing Director at Wilshire. "Despite most asset classes experiencing negative returns during the month with the FT Wilshire 5000 IndexSM posting its worst monthly performance since September 2023 and ending five consecutive months of gains, the aggregate funded ratio is estimated to have increased due to the liability value decrease. April’s month-end funded ratio estimate of 110.8% remains at its highest in decades." added Mr. McGuire.

A 12-month review of the funded ratio follows:

The aggregate figures represent an estimate of the combined assets and liabilities of corporate pension plans sponsored by S&P 500 companies with a duration in line with the FTSE Pension Liability Index – Short. The funded ratio is based on the FTSE – Short Liability, with service cost, benefit payments and contributions in line with Wilshire’s 2023 corporate funding study. The most current month-end liability growth is estimated using a FTSE Pension Liability Index – Short duration matched weighting of the Barclays Long

and Intermediate Aa+ U.S. Corporate Indices.

The Data

Wilshire’s practice is to collect data on U.S. pensions from 10-K filings for companies in the S&P 500 Index at fiscal year-end (FYE). All data for fiscal year 2022 is based on the 253 S&P 500 Index constituents that maintain defined benefit pension plans as of year-end 2022.  The estimated monthly funded ratios are based on liabilities, service cost, benefit payments and contributions in line with Wilshire’s 2023 corporate funding study.

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