The 100 largest U.S. corporate defined benefit pension plans studied by Milliman saw their combined funding ratio rise to 75.5% in February, from 74.3% a month earlier.
The plans' combined deficit was $413 billion as of Feb. 29, a 4.6% improvement from the end of January attributed primarily to strong investment gains last month and a discount rate that dropped only one basis point to 4.25% at the end of February.
The combined asset value of the pension plans reached $1.276 trillion in February, up 1.9%, while the combined projected benefit obligation increased 0.2% to $1.689 trillion.
While the increase in funded status is significant, there is a lot of ground to gain following a second half of 2011 that saw the deficit double.
“We're at the highest level of liabilities that we've had in (Milliman's) 12-year history,” said John Ehrhardt, principal and consulting actuary at Milliman, in a telephone interview.
“The only way we're going to see a significant decrease in funded status is if we see a win-win” — an increase in discount rates and strong investment returns.