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

Wilshire estimates 1.1 percentage point increase in aggregate funded ratio for U.S. corporate pension plans in June and 2.6 percentage point increase in the second quarter.

Santa Monica, Calif., July 1, 2024 – The aggregate funded ratio for U.S. corporate pension plans increased by an estimated 1.1 percentage points in June, ending the month at 102.3%, 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 1.0% increase in asset value and no noticeable increase or decrease in liability value. Although the aggregate funded ratio is estimated to have decreased by 1.1 percentage points over the trailing twelve months, it is estimated to have increased by 6.5 and 2.6 percentage points year-to-date and in the second quarter, respectively.

"June's funded status increase resulted from continued asset value increases, with most asset classes posting positive returns. The FT Wilshire 5000 IndexSM notably returned over 3% in June and more than 13% in the first half of 2024," commented Ned McGuire, Managing Director at Wilshire. "Broad U.S. equity markets reached new highs multiple times during June and year to date, propelling the estimated increase in the aggregate funded ratio for both June and year to date." 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 2024 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 2023 is based on the 253 S&P 500 Index constituents that maintain defined benefit pension plans as of year end 2023.  The estimated monthly funded ratios are based on liabilities, service cost, benefit payments and contributions in line with Wilshire’s 2024 corporate funding study.

We should note that our estimated monthly funded status of U.S. corporate plans proxy private assets’ returns using publicly available benchmarks. This year, our methodology provided higher than actual realized asset returns due to the difference in returns between private assets compared to public markets and this change was reflected as of December 31, 2023.

The Assumed Asset Allocation

About Wilshire

Wilshire is a leading global financial services firm and trusted partner to a diverse range of approximately 500 leading institutional investors and financial intermediaries. Our clients rely on us to improve investment outcomes for a better future. Wilshire advises on over $1.4 trillion in assets and manages $112 billion in assets as of December 31, 2023. Wilshire is headquartered in the United States with offices worldwide. More information on Wilshire can be found at www.wilshire.com

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Unless otherwise noted, data and figures related to historical and current macroeconomic trends as well as company-specific developments are sourced from Bloomberg and Barclays.

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