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Pension Funded Status Down Due to Lower Rates

Citigroup Pension Liability Index & Milliman 100 Pension Funding Index

First quarter market turmoil pushed interest rates lower to levels last seen in 2014. As a result, the funded status for the 100 largest corporate pension plans declined over the first quarter from 82.7% to 77.9%, according to the Milliman 100 Pension Funding Index survey. The pension discount rate fell to around 3.8% in March, which was the lowest level year-to-date. This move caused liability values to rise about 6.3%, while asset values ended up at levels similar to the start of the year.

*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.