Tag Archives: milliman

05.11.26
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Milliman: Corporate Pension Funding Highest Since 2007

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

Milliman has once again released its monthly Milliman 100 Pension Funding Index (PFI), which analyzes the 100 largest U.S. corporate pension plans. It would be fascinating to see how these 100 plans differ from a list just 20-years ago.

As for today’s members, the Milliman 100 PFI plans showed improved funding by $23 billion during April. These stellar results were driven by strong equity returns as the constituents averaged a 2.13% gain. As a result, the funded ratio dramatically improved from 105.9% at the end of March to 107.8% at the end of April representing the highest level of funding since October 2007, when it stood at 108.1%. Strong investment gains increased assets by $20 billion and now stand at $1.297 trillion, while the projected benefit obligation fell slightly to $1.204 trillion, as the monthly discount rate edged up one basis point, to 5.66% from 5.65%. 

“After a flat first quarter, the funding surplus grew to $94 billion at the end of April, primarily due to strong market returns,” said Zorast Wadia, author of the Milliman 100 PFI. “This means plan sponsors continue to have more pension risk management options as plans move further into surplus territory.”

Plan sponsors would be wise to seek risk reducing strategies. The previous high watermark was achieved in October 2007, just prior to the start of the Great Financial Crisis, which pummeled markets through March of 2009. As the graph below highlights, the Milliman 100 went from a small surplus in the Q3’07 to a major deficit within 6 months. It would be another 13-years before a surplus was once again created.

Plan sponsors should secure the pension promises through a cash flow matching (CFM) strategy and then actively manage surplus assets since they’ve now created a much longer investing horizon for those assets. Ryan ALM, Inc. is always willing to provide a free analysis of what is possible through CFM.

For the full Milliman report, click on the link below.

View this month’s complete Pension Funding Index.

03.06.26
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Milliman: Corporate Pension Funding now at 109.4%

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

Milliman has released the latest monthly report on the Milliman 100 Pension Funding Index (PFI). As a reminder, this index analyzes the 100 largest U.S. corporate pension plans.

For February, the PFI funded ratio rose from 109.1% as of January 31, to 109.4% as of February 28, marking the highest collective funded ratio since the 109.9% mark observed in July 2001. However, the funding improvement was solely a result of asset performance, as declining discount rates of 14 basis points reduced the discount rate to 5.33% and raised the PFI projected benefit obligation (liabilities) to $1.235 trillion. Fortunately, monthly returns of 2.15% offset the impact of falling U.S. interest rates leading to growth in the market value of plan assets by $22 billion, to $1.351 trillion.

“February’s investment performance drove the month’s $5 billion gain in funding levels,” said Zorast Wadia, author of the Milliman PFI. He went on to say that “while this marks 11 straight months of funding improvements, further declines in interest rates may occur, and ongoing market volatility makes it vital for plan sponsors to undertake surplus-management strategies focused on both sides of the balance sheet.” We continue to support Zorast in recommending that managing assets to liabilities is critical for DB pension plans in all market environments, but especially given the significant uncertainty under which markets are currently operating. As a reminder, the primary objective in managing a DB pension is to SECURE the promised benefits at a reasonable cost and with prudent risk. It is NOT a return objective.

We, at Ryan ALM, do not forecast interest rates, but the impact of rising oil prices (WTI currently up 30.7% as of 9:13 am EST since Friday) will likely have an impact on inflation and interest rates. It will be interesting to see if a potential fall in the value of liabilities proves greater than the potential impact that rising rates might have on equity markets and other assets. Will we see the 12th consecutive month of improved funding levels?

Please click on the link below for a look at the complete Milliman corporate pension funding report.

View this month’s complete Pension Funding Index.

02.10.26
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Milliman: Corporate Pension Funding Soars

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

Milliman has once again released its monthly Milliman 100 Pension Funding Index (PFI), which analyzes the 100 largest U.S. corporate pension plans, and the news continues to be quite good.

Market appreciation of 1.05% during January lifted the market value of PFI plan assets by $8 billion increasing total AUM to $1.327 trillion. A slight 1 bp rise in the discount rate to 5.47% lowered plan liabilities marginally to $1.217 trillion at the end of January. As a result, the PFI funded ratio climbed from 108.2% at the beginning of the year to 109.0% as of January 31, 2026. 

“January’s strong returns contributed $8 billion to the PFI plans’ funding surplus, while declining liabilities contributed another $2 billion,” said Zorast Wadia, author of the Milliman 100 PFI. “Although funded ratios have now improved for 10 straight months, managing this surplus will continue to be a central theme for many plan sponsors as they employ asset-liability matching strategies going forward.” We couldn’t agree more, Zorast! Given significant uncertainty regarding the economy, inflation, interest rates, and geopolitical events, now is the time to modify plan asset allocations by reducing risk through a cash flow matching strategy (CFM).

CFM will secure the promised benefits, provide the necessary monthly liquidity, extend the investing horizon for the non-CFM assets, while stabilizing the funded status and contribution expenses. Corporate plan sponsors have worked diligently tom improve funding and markets have cooperated in this effort. Now is not the time to “let it ride”. Ryan ALM will provide a free analysis to any plan sponsor that would like to see how CFM can help them accomplish all that I mentioned above. Don’t be shy!

Click on the link below for a look at Milliman’s January funding report.

View this month’s complete Pension Funding Index.

For more on Ryan ALM, Inc.

01.09.26
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Milliman: Corporate Pension Funding UP – Again!

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

Milliman released its monthly Milliman 100 Pension Funding Index (PFI), which analyzes the 100 largest U.S. corporate pension plans. They reported that the funded ratio has now improved for nine straight months – impressive! As of December 31, 2025, the funded ratio for the index constituents is 108.1%, which is up substantially from year end 2024’s 103.6%.

The increase in the funded ratio for December (and the year) was mostly driven by the performance of the assets for the index’s constituents that saw an 11.32% average return for the year, increasing asset values by $53 billion. A rather stable interest rate environment lead to only a $1 billion decline in the PV of those FV liabilities.

According to Zorast Wadia, author of the Milliman 100 Pension Funding Index report, “discount rates fell during the year, and this trend could extend into 2026, potentially reversing some of the recent funded status gains and underscoring the continued need for prudent asset-liability management.” We couldn’t agree more.

It was the significant decline in U.S. interest rates during a nearly four decade bull market for bonds that really crushed funding for private DB pension plans. It would be tragic to witness a deterioration in the funded ratio/status after reclaiming a strong financial footing. Secure those promises and sit back and enjoy managing surplus assets.

Here is the link to the full December report: View this month’s complete Pension Funding Index

10.21.25
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Milliman: Another good month for pension funding

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

Whether one is referring to public pensions or private DB plans, September was a continuation of the positive momentum experienced for most of 2025. Milliman has reported on both the Milliman 100 Pension Funding Index (PFI), which analyzes the 100 largest U.S. corporate pension plans and its Public Pension Funding Index (PPFI), which analyzes data from the nation’s 100 largest public defined benefit plans.

Milliman estimates that public pension funds saw aggregate returns of 1.7%, while corporate plans produced an average return for the month of 2.5%. As a result of these gains (sixth consecutive gain), public pension funded ratios stand at 85.4% up from 84.2% at the end of August. Corporate plans are now showing an aggregate funded ratio of 106.5%, marking the highest level since just before the Great Financial Crisis (GFC).

Public pension fund assets are now $5.66 trillion versus liabilities of $6.63 trillion, while corporate plans added $26 billion to their collective net assets increasing the funded status surplus to $80 billion. For corporate plans, the strong 2.5% estimated return was more than enough to overcome the decline in the discount rate to 5.36%, a pattern that has persisted for much of 2025.

“Robust returns helped corporate pension funding levels improve for the sixth straight month in September,” said Zorast Wadia, author of the Milliman PFI. “With more declines in discount rates likely ahead, funded ratios may lose ground unless plan assets move in lockstep with liabilities.”

“Thanks to continued strong investment performance, public pension funding levels continued to improve in September, and unfunded liabilities are now below the critical $1 trillion threshold for the first time since 2021,” said Becky Sielman, co-author of the Milliman PPFI. “Now, 45 of the 100 PPFI plans are more than 90% funded while only 11 are less than 60% funded, underscoring the continued health of public pensions.”

Discount rates have so far fallen in October. It will be interesting to see if returns can once again prop up funded status for corporate America. It will also be interesting to see how the different accounting standards (GASB vs. FASB) impact October’s results. A small gain for corporate plans may not be enough to overcome the potential growth in liabilities, as interest rates decline, but that small return may look just fine for public pension plans, that don’t mark liabilities to market only assets.

View this Month’s complete Pension Funding Index.

View the Milliman 100 Public Pension Funding Index.

07.08.25
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Milliman: Corporate Pension Funding Up

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

Milliman released its monthly Milliman 100 Pension Funding Index (PFI), which analyzes the 100 largest U.S. corporate pension plans, and they are reporting that the collective funded ratio has risen to 105.1% as of June 30th from 104.9% at the end of May. The driving force behind the improved funding was the powerful 2.6% asset return for the index’s members, which more than offset the growth in pension liabilities as the discount rate fell by 19 bps.

As a result of the significant appreciation during the month, the Milliman PFI plan assets rose by $27 billion to $1.281 trillion during the month from $1.254 trillion at the end of May. The discount rate fell to 5.52% in June, from 5.71% in May and it is now down slights from 5.59% at the beginning of the year. 

“The second quarter of 2025 was a win-win for pensions from both sides of the balance sheet, as market gains of 3.42% drove up plan assets while modest discount rate increases of 2 basis points reduced plan liabilities and resulted in the highest funded ratio since October 2022,” said Zorast Wadia, author of the PFI.

Zorast further stated that “if discount rates decline in the second half of the year, plan sponsors will need to be ever more focused on preserving funded status gains and employing prudent asset-liability management.” We couldn’t agree more. We, at Ryan ALM, believe that the primary goal in managing a DB pension plan is to secure the promised benefits at a reasonable cost and with prudent risk. It is NOT a return objective. Having achieved this level of funding allows plan sponsors and their advisors to significantly de-risk their plans through Cash Flow Matching (CFM), which is a superior duration strategy, as each month of the assignment is duration matched.

05.08.25
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Improved Corporate Pension Funding – Milliman

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

Milliman released the results of its 2025 Corporate Pension Funding Study(PFS). The study analyzes pension data for the 100 U.S. public companies with the largest defined benefit (DB) pension plans. Unlike the monthly updates provided by Milliman, this study covers the 2024 fiscal years (FY) for each plan. Milliman has now produced this review for 25 consecutive years.

Here are Milliman’s Key findings from the 2025 annual study, including:

  • The PFS funded percentage increased from 98.5% at the end of FY2023 to 101.1% in FY2024, with the funded status climbing from a $19.9 billion deficit to a $13.8 billion surplus.
  • This is the first surplus for the Milliman 100 companies since 2007.
  • As of FY2024, over half (53) of the plans in the study were funded at 100% or greater; only one plan in the study is funded below 80%. RDK note: This is a significant difference from what we witness in public pension funding studies.
  • Rising U.S. interest rates aren’t all bad, as the funding improvement was driven largely by the 42-basis point increase in the PFS discount rate (from 5.01% to 5.43%)
  • Higher discount rates lowered the projected benefit obligations (PBO) of these plans from $1.34 trillion to $1.24 trillion.
  • While the average return on investments was 3.6% – lower than these plans’ average long-term assumption of 6.5% – the underperformance of assets did not outstrip the PBO improvement. Only 19 of the Milliman 100 companies exceeded their expected returns. 
  • According to Milliman, equities outperformed fixed-income investments for the sixth year in a row. Over the last five years, plans with consistently high allocations to fixed income have underperformed other plans but experienced lower funded ratio volatility. Since 2005, pension plan asset allocations have swung more heavily toward fixed income, away from equity allocations.

“Looking ahead, the economic volatility we’ve seen in 2025 plus the potential for declining interest rates likely means corporate plan sponsors will continue with de-risking strategies – whether that’s through an investment glide-path strategy, lump-sum window, or pension risk transfer,” said Zorast Wadia, co-author of the PFS. “But with about $45 billion of surplus in frozen Milliman 100 plans, there’s also the potential for balance sheet and cash savings by incorporating new defined benefit plan designs.” One can only hope, Zorast.

Final thought: Given the unique shape of today’s Treasury yield curve, duration strategies may be challenged to reduce interest rate risk through an average duration or a few key rates. As a reminder, Cash Flow Matching (CFM) duration matches every month of the assignment. Use CFM for the next 10-years, you have 120 bespoke duration matches.

04.11.25
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Milliman – Corporate Pension Funding Falls in March

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

Milliman has just released its monthly Milliman 100 Pension Funding Index (PFI), which analyzes the 100 largest U.S. corporate pension plans. Weak investment returns, estimated at -1.4%, drove the PFI asset level down by $25 billion during March. Current assets for the top 100 plans are now $1.3 trillion. The fall in assets was only partially offset by the rise in the discount rate (13 bps) during the month. As a result, the surplus fell by $7 billion to $51 billion as of March 31, 2025.

The discount rate ended the month at 5.49%, which reduced plan liabilities by $18 billion, to $1.25 trillion by the end of March. As a result of assets falling by more than liabilities, the PFI funded ratio dropped from 104.6% at the end of February to 104.1% at the end of March. For the quarter, discount rates fell 10 basis points and the Milliman 100 plans lost $8 billion in funded status.   

“While the slight rise in discount rates in March led to a monthly decline in plan liabilities, plan assets fell even further due to poor market performance, which caused the funded status to fall below the 104.8% level seen at the beginning of 2025,” said Zorast Wadia, author of the PFI. Given market action during the first 10 days of April, it will be interesting to see if the impact from rising rates can offset the dramatic fall in asset values. Inflation fears fueled by tariffs could lead to rising bond yields, which will help mitigate some of the risk to equities given the possibility of declining earnings. As Zorast mentioned in the Milliman release, “plan sponsors will want to consider asset-liability matching strategies to preserve their balance sheet gains from last year”, especially given that 30-year corporates are once again yielding close to 6%.

02.24.25
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ARPA Update as of February 21, 2025

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

Welcome to the last week in February. Spring can’t arrive soon enough in New Jersey!

Last week the Milliman organization published its annual review of the state of multiemployer pension plans. The news was quite positive, but in digger deeper, it became apparent that the payment of the Special Financial assistance (SFA) was the primary reason for the improved funding ratios. Given how critically important the SFA is to the ongoing success of many of these plans, let’s look at what transpired during the previous week.

According to the PBGC’s weekly spreadsheet, there were no new applications filed as the eFiling portal remains temporarily closed. In addition, no applications were approved or denied, but there was one application withdrawn, as non-priority plan Aluminum, Brick & Glass Workers International Union, AFL-CIO, CLC, Eastern District Council No. 12 Pension Plan (the plan’s name is longer than the fund’s size is large) pulled its application seeking $10.6 million for 580 participants.

There was some additional activity though, as five plans were asked to repay a portion of the previously agreed SFA due to census errors. In total, these plans repaid $16.3 million representing just 1.06% of the grants received. To date, $180.8 million has been reclaimed from grants totaling $43.6 billion or 0.41%.

In other news, we had Bricklayers & Allied Craftworkers Local No. 3 NY Niagara Falls-Buffalo Chapter Pension Plan, added to the waitlist (#116). This is the first addition to the list since July 2024. This plan did not elect to lock-in the interest rate for discount rate purposes, joining a couple other plans that have kept their options open.

We should witness dramatic improvement in the Milliman funded ratio study next year, as about 7% (85 funds) were funded at <60% in 2024. There are currently 94 plans seeking SFA support. If granted, they should all see meaningful improvement in the funded status of their plans. As a result, we could have a situation in which the multiemployer universe becomes fully funded. How incredible. Now, let’s not do something silly from an investment standpoint that would jeopardize this improved funding.

02.21.25
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Milliman’s Multiemployer Study Released

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

Milliman released the 2024 year-end results of its Multiemployer Pension Funding Study (MPFS). The MPFS analyzes the funded status of ALL U.S. multiemployer DB pension plans. As of December 31, 2024, Milliman estimated multiemployer plans have an aggregate funded ratio of 97%, up from 89% as of December 31, 2023. Impressive!

Milliman determined that the improved funded status was largely due to investment gains, but they also highlighted the critical contribution from the special financial assistance (SFA) granted under the ARPA. Milliman highlighted that as of year-end 2024, 102 plans have received nearly $70 billion in SFA funding, including $16 billion paid during 2024. Incredibly, without the support of SFA grants, the MPFS plans’ aggregate funded percentage at year-end 2024 would be approximately 89% or the same as the end of December 2023. As my chart below highlights, as of today, 109 plans have now received $71 billion in SFA grants.

Chart provided by Ryan ALM, Inc.

According to Milliman, “53% (627 of 1,193 plans) are 100% funded or more, and 84% (1,005) are 80% funded or better.” They also highlighted the more challenged members of this cohort, stating that “7% of plans (85) are below 60% funded and may be headed toward insolvency. Many are likely eligible and expected to apply for SFA in 2025.” As the chart above highlights, there still 93 plans going through the process of submitting applications with the PBGC to receive SFA support.

ARPA’s pension reform legislation has clearly been a godsend to many struggling multiemployer plans (roughly 10% of ME plans to date). That said, a review of the universe of all multiemployer plans points to terrific stewardship of the retirement assets on the part of a significant percentage of plans. My one concern is that the use of the return on Asset (ROA) assumption by most of these plans as the discount rate for plan liabilities is overstating the true funded status relative to a discount rate of a blended AA corporate rate used by the private sector. Milliman’s other DB pension plan studies have public sector plans at an 81.2% funded ratio and private plans at 105.8%.