U.S. Corporate Pension Plans Funding Status – April 2023

Wilshire estimates slight increase in aggregate funded ratio for U.S. corporate pension plans in April

Santa Monica, Calif., May 1, 2023 – The aggregate funded ratio for U.S. corporate pension plans increased by an estimated 0.4 percentage points in April and ended the month at 99.4%, according to Wilshire, a diversified global financial services firm. Through its suite of Outsourced Chief Investment Officer (OCIO) and advisory services, Wilshire assists in providing secure and safe retirements for millions of Americans, including those participating in some of the nation’s largest corporate and public retirement plans.

The monthly change in funded ratio resulted from a 0.5% rise in asset value, while the liability value remained unchanged. The aggregate funded ratio is estimated to have increased by 1.9% and 1.4% year-to-date and over the trailing twelve months, respectively.

“April’s funded status was a result of an increase in asset value. Fixed income yields declined slightly on continued signs of cooling inflation and expectations of the Federal Reserve interest rate hikes near completion,” stated Ned McGuire, Managing Director, Wilshire. “With positive returns for most asset classes for a second consecutive month, U.S. corporate pension plans are inching towards full funding in aggregate” Mr. McGuire added.

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 2022 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 & Intermediate Aa+ U.S. Corporate Indices.

The assumed asset allocation is below:

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