The funded status for the largest U.S. corporate pension plans fell slightly in May as liability growth outpaced assets, said reports from Milliman and Aon Hewitt.
The funded status of the 100 largest U.S. corporate pension plans fell 1.1 percentage points to 83.8% in May, the Milliman 100 Pension Funding index showed Thursday.
Liabilities rose 1.5% in May to $1.724 trillion, the result of a 12-basis-point drop in the discount rate to 3.76%. Asset values increased 0.28% to $1.445 trillion, the result of a 0.62% investment return.
If the pension funds achieve a median 7% asset return and the discount rate remains at 3.76%, the funding ratio would increase to 85.1% by the of 2017 and 87.7% by the end of 2018, Milliman predicted.
According to the Aon Hewitt Pension Risk Tracker, the aggregate funded status for defined benefit plans sponsored by S&P 500 companies fell 40 basis points to 81.5% at the end of May.
Liabilities increased 1.4% in May to $2.106 trillion, driven by the 13 basis-point-drop in the discount rate to 3.69%, and outpacing a 0.94% increase in assets to $1.7168 trillion, which was driven by positive investment returns of 1.3%, Aon Hewitt said.