Milliman: Funded status inches lower for 100 largest corporate pension plans

The funded status of the 100 largest U.S. corporate defined benefit plans fell slightly in November as liabilities rose more than assets, the Milliman 100 Pension Funding index shows.

The estimated funding ratio of the 100 plans fell 20 basis points to 84.6% at the end of November, down from 84.8%.

Liabilities rose $26 billion to $1.76 trillion because of an 11-basis-point drop in the discount rate to 3.89% for November.

Assets rose $18 billion to $1.49 trillion — a result of November investment returns of 1.49%.

If the pension funds achieve a median 7.4% return and the discount rate remains at the current 3.89%, the funded status would improve to 87% by the end of 2015.

“The story this year seems to be the same month after month, and in November, it's exactly the same as it was in October — an $8 billion increase in the funded status deficit, with liabilities exceeding positive asset performance,” said John Ehrhardt, principal and consulting actuary at Milliman and co-author of the report, in a news release. “For the year, interest rates have dropped by 79 basis points, driving a $167 billion liability increase.”