Pension Markets

Corporate Pension Funded Ratio Increases For Sixth Straight Month

Milliman 100 PFI funded status surplus surpasses $100 billion

Milliman 100 Pension Funding Index analyzes the 100 largest U.S. corporate pension plans. To view the complete Pension Funding Index, visit here. To see Milliman’s full range of annual Pension Funding Studies, visit here. To receive regular updates of Milliman’s pension funding analysis.

SEATTLE, June 7, 2022 /PRNewswire/ — Milliman, Inc., a premier global consulting and actuarial firm, today released the results of its latest Milliman 100 Pension Funding Index (PFI).

As of May 31, the Milliman 100 PFI funded ratio rose to 107.0%, from 106.4% at the end of April. The PFI funded ratio has been at least 95% for the last fifteen months.

PFI liabilities decreased for the month, representing a gain of $10 billion for May, while the market value of assets fell by $2 billion as a result of the modest investment return of 0.33%. Overall, these corporate pensions experienced an $8 billion funded status improvement in May, propelling the funded status surplus to $104 billion.

“Corporate pensions crossed the $100 billion funded status surplus mark, a stunning contrast to the past several years when the funding deficit measured several hundred billion dollars,” said Zorast Wadia, co-author of the PFI. “Despite down financial markets, discount rates continue their assent and pension plan sponsor balance sheets continue to improve, paving the way for newer risk management strategies.”

Looking forward, under an optimistic forecast with rising interest rates (reaching 4.69% by the end of 2022 and 5.29% by the end of 2023) and asset gains (9.9% annual returns), the funded ratio would climb to 115% by the end of 2022 and 131% by the end of 2023. Under a pessimistic forecast (3.99% discount rate at the end of 2022 and 3.39% by the end of 2023 and 1.9% annual returns), the funded ratio would decline to 101% by the end of 2022 and 92% by the end of 2023.

 

 

 

About Milliman
Milliman is among the world’s largest providers of actuarial and related products and services. The firm has consulting practices in healthcare, property & casualty insurance, life insurance and financial services, and employee benefits. Founded in 1947, Milliman is an independent firm with offices in major cities around the globe. For further information, visit milliman.com.