The funded status of the 100 largest U.S. corporate defined benefit plans improved slightly in September, said the Milliman 100 Pension Funding index.
The estimated funding ratio of the 100 plans increased to 85.2% at the end of September, up from 84.1% the previous month.
It reflects a drop in the estimated projected benefit obligation to $1.709 trillion from $1.754 trillion, the result of a 21-basis-point increase in the discount rate to 4.1% for September. The previous month, the discount rate had dropped 21 basis points.
The discount rate hike made up for a drop in the market value of assets — to $1.456 trillion from $1.475 trillion — a result of September investment returns of -1.03%.
Overall, for the third quarter of 2014, the funding ratio dropped 10 basis points from 85.3% at the end of June.
John Ehrhardt, principal and consulting actuary at Milliman, did not return a phone call by press time.