By: Russ Kamp, CEO, Ryan ALM, Inc.
Milliman has once again released the findings from the Milliman 100 Pension Funding Index (PFI). The index analyzes the top 100 largest corporate pension plans. May’s results highlighted an improved funded ratio, as the present value (PV) of liabilities fell by $19 billion, while assets grew by $2 billion. The combination led to a funded ratio of 104.9%, up from 103.0% as of April 30, 2025.
“The large jump in discount rates was the primary reason the PFI funded ratio rose for the second straight month in May,” said Zorast Wadia, author of the PFI. Today’s rate environment is likely putting pressure on traditional core fixed income strategies, but higher rates are providing plan sponsors of DB pension plans a wonderful opportunity to reduce risk by defeasing pension liabilities through cash flow matching (CFM).
“While this (large jump in discount rates) helped to offset the first-quarter funding slump, discount rates may not remain elevated indefinitely, underscoring the value of an asset-liability matching strategy for corporate pensions.” said Wadia. Don’t continue to live with great uncertainty. Secure a portion of your fund’s promises and bring a level of certainty to your plan. There is no better “sleep well at night” strategy than CFM.
Milliman’s full report can be viewed by clicking on the link below.
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