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Pension Funds

Corporate pension funds reverse funding decline in July — 2 reports

The funded status of the largest U.S. corporate pension plans rose in July, 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 1 percentage point in July to 84.3%.

Asset values increased 1.3% over the month, outpacing a 0.3% increase in liabilities, Wilshire said. Year-to-date through July 31, the aggregate funded ratio is up 2.4 percentage points.

"July ended three months of declines in funded ratios after seven consecutive months of rising or flat funded ratios," said Ned McGuire, vice president and a member of the pension risk solutions group of Wilshire Consulting, in a news release on the results. "July's increase was driven by the increase in asset values resulting from positive returns for most asset classes as equity indices notched multiple record closes throughout the month."

According to LGIMA, 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 1.1 percentage points over the month to 83.9% as of July 31, the result of a 1.9% increase in assets and 0.6% increase in liabilities. Discount rates fell 2 basis points over the month, LGIMA said.