The funded ratio of Towers Perrins hypothetical benchmark pension plan increased 0.5 percentage points in May to 69.7%.
The increase puts the rise in funded status at 9.5 percentage points since bottoming out at 60.2% in February, according to a Towers Perrin news release. However, the May funded ratio is 22 percentage points below the previous year.
The benchmark portfolio, 60% equities and 40% fixed income, returned 4% for May, while a 40% equity portfolio returned 2.9%, and an 80% equity portfolio returned 5.1%.
The increase was driven by improved equity performance, but was blunted by a decline in long corporate yields that increased liability values. For May, the S&P 500 returned 5.6%; the Russell 2500, 3.1%; and the MSCI EAFE, 11.8%. Fixed-income returns didnt fare as well. Three-month T-bills were flat; long Treasury bonds returned -2.7%; Barclays Capital Aggregate Bond Index, 0.7%; and long corporate bonds, 4.5%.
Basically, were just climbing out of the hole, Jerry Mingione, head of the retirement financial management unit at Towers Perrin, said in an interview.