By: Russ Kamp, CEO, Ryan ALM, Inc.

The monthly Milliman 100 Pension Funding Index (PFI) was recently released. As a reminder, the PFI analyzes the 100 largest U.S. corporate pension plans. According to Milliman, overall pension funding improved by $3 billion which included $5 billion in asset growth offset by $2 billion in liabilities as the discount rate fell by 2 bps.

Milliman 100 plan asset value increase was driven by August’s 0.92% investment return. Those 100 corporate plans now have aggregate assets of $1.299 trillion as of August 31. As mentioned earlier, that growth in assets was partially offset by a $2 billion increase in pension liabilities, resulting from a two-basis-point decrease in the monthly discount rate, which is now 6.00% at the end of August.

The Milliman 100 projected benefit obligation was $1.158 trillion as of the end of last month. 

“Despite the slight uptick in liabilities, August’s funded ratio is 112.2% — which continues to be a 25-year high for these plans,” said Zorast Wadia, author of the Milliman PFI. “Well-funded corporate sponsors should be examining ALM strategies and cash balance plan options.” We couldn’t agree more, Zorast! As I wrote yesterday in my pension alert post, U.S. interest rates continue to rise providing pension plan sponsors with a wonderful opportunity to SECURE the benefit promises at significant cost savings, while stabilizing both the funded status and contribution expenses. So much improvement has been made within DB pension plans. It would be shameful to let this opportunity go by without taking advantage.

View this month’s complete Pension Funding Index.

View Milliman’s full range of annual Pension Funding Studies.