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U.S. corporate pension funding rises to 84% at end of first quarter — 2 reports

The aggregate funded status of the largest U.S. corporate pension plans rose in the first quarter to about 84%, said reports from Wilshire Consulting and Legal & General Investment Management America.

According to Wilshire, the aggregate funding ratio for S&P 500 companies with corporate pension plans rose 2 percentage points to 83.9% over the three months ended March 31.

In March alone, the funded status rose 90 basis points, driven by a 0.9% decrease in liability values. Asset values remained relatively flat in March, Wilshire said.

“March marked the seventh consecutive month of rising or flat funded ratios, which has contributed to March month-end funded ratios being the highest since October 2015,” said Ned McGuire, vice president and a member of the pension risk solutions group at Wilshire Consulting, in a news release on the results. “This month’s increase was primarily driven by the decrease in liability values caused by the 9 basis points rise in corporate bond yields used to value pension liabilities.”

Separately, LGIMA found that the funded status of a typical U.S. corporate pension plan with a 60% allocation to global equity and 40% to core fixed income rose an estimated 2.6 percentage points in the first quarter to 83.9% as asset growth outpaced liabilities.

Assets for the average plan were up 4.53% for the quarter, driven by positive global equity returns of 7.05% and the S&P 500’s return of 6.07%. Liabilities for the average plan rose 1.27% over the quarter, driven by an estimated one-basis-point drop in the discount rate to 4.07%.

In March alone, the funded status rose an estimated 1.2 percentage points, according to LGIMA.