The funded status of the typical corporate U.S. defined benefit pension plan increased about six percentage points in the second quarter, helped primarily by a significant drop in liability values, according to a quarterly report from UBS Global Asset Management.
According to the UBS Pension Fund Fitness Tracker, using data from 500 U.S. corporations' defined benefit plans, the typical funded status improved to 88%, the highest level since 2008. A typical plan's portfolio returned a modest 0.4% during the quarter. However, a rise in the discount rate caused liabilities to drop 6.1% during the period.
The S&P 500 index finished the quarter up 2.9%, while the MSCI EAFE index was up 1.5%. The yield on 10-year U.S. Treasury bonds increased 64 basis points to 2.49%, while the 30-year yield increased 40 basis points to 3.5%.