The 100 largest U.S. corporate plans took a $9 billion hit to their balance sheets in September, with an 83-basis-point increase in the monthly discount rate not enough to offset a $78 billion loss tied to volatile equity markets, according to data from consulting and actuarial firm Milliman.
It should come as no surprise that pensions suffered during the sharp market downturn in September, John Ehrhardt, Milliman director, said in a news release. Fortunately these losses were offset by gains in interest rates.
We cannot predict where the market will close at the end of October, though Wednesdays worldwide reduction in interest rates seems to indicate that we may not have such an offset in October, he said in the release.
The funded ratio of these plans dropped to 98.4% at the end of September, from 104.9% at the start of the year.
The corporate plans that were measured are in the Milliman 100 Pension Funding Index.