The prospect that a Fed rate increase is in the near future pushed interest rates higher along the yield curve at the end of the third quarter. The Milliman 100 Pension Funding Index Survey of the 100 largest corporate pension plans found that their funded ratio increased to 76.3% from 75.7% at the end of the third quarter. Pension assets, dominated by long duration bonds, fell during the quarter, as the gains in the funded status came from a decrease in liability valuation. The liability discount rate increased from 3.32% to 3.42% as of quarter-end
*The Milliman Pension Funding Index is based on actual pension plan accounting information for the 100 largest defined benefit pension plans sponsored by U.S. public companies. The index is based on a ratio of the market value of assets compared to the projected benefit obligation (PBO), as a measure of the pension liabilities.