The funded status of corporate defined benefit plans was relatively flat in May with rising liabilities offsetting asset returns, according to three monthly funded status reports.
The funded status for a typical corporate DB plan, decreased to 90.6% in May, down 0.4 percentage points from the previous month, according to the BNY Mellon Institutional Scorecard.
The funding drop is the result of liabilities increasing 2.3%, while assets returned 1.9%. The rise in liabilities is the result of the discount rate falling 14 basis points to 4.28% in May.
The drop in funded status brings the typical corporate DB plan down a total of 4.6 percentage points from a high of 95.2% at the end of December.
The typical public DB plan returned 1.6%, exceeding its monthly return target of 0.6%.
The typical foundation and endowment returned 1.1 percent.
Meanwhile, the funding ratio of S&P 1500 companies with pension plans remained relatively unchanged at 84% in May, according to a monthly report from Mercer.
U.S. equity markets were up 2.3% in May, while the discount rate was down 11 basis points to 4.06%.
Estimated aggregate assets as of May 31 totaled $1.87 trillion, up from $1.84 trillion at the end of April and up from $1.8 trillion as of Dec. 31. Estimated projected benefit obligations totaled $2.21 trillion, up from $2.2 trillion as of April 30 and up from $2.03 trillion at the end of December.
Separately, the funding ratio for the typical U.S. corporate pension plan decreased 0.4 percentage points in May to 85.8%, according to a report from Wilshire Consulting.
The decline was driven by rising liabilities, which increased 2.2% during the month.
Since Jan. 1, the funding ratio has decreased four percentage points to 85.8% from 89.8%.
The typical pension fund, as studied by Wilshire, has an asset allocation of 33% domestic equity, 26% long-duration fixed income, 22% international equity, 17% core fixed income and 2% real estate. Wilshire uses data of S&P 500 company pension funds derived from corporate filings to create the model plan.
