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Corporate Pension Funded Status Improves

Citigroup Pension Liability Index & Milliman 100 Pension Funding Index
Funded status for the 100 largest corporate pension plans rose to 85.6% during the second quarter from 81.0% at the end of the first quarter of 2015, according to the Milliman100 Pension Funding Index survey of 100 of the largest corporate pensions. Primarily contributing to this gain was the steady increase in the corporate bond discount rate, while weak to negative asset returns were a detriment to closing the funding gap. Improving economic data, in conjunction with Federal Reserve commentary, has caused the bond market to reassess and accelerate the expectations for the timing of the Fed’s first interest rate hike. The majority of analysts expect the first interest rate increase to occur in September, 2015.