The aggregate funding ratio for U.S. corporate defined benefit plans sponsored by S&P 500 companies rose 90 basis points to 76.9% in September, said a report from Wilshire Consulting.
The funding increase was driven by a 1.6% drop in liability values vs. a 0.3% decrease in asset values.
“Asset values fell modestly in September due to benefit payments and flat overall asset returns during the month,” said Ned McGuire, vice president and a member of the pension risk solutions group of Wilshire Consulting, in a news release on the results. “The Wilshire 5000 Total Market index was relatively flat, gaining just 0.1% during the month, while rising corporate bond yields pushed liability values lower for the second consecutive month.”
For the three months ended Sept. 30, the aggregate funding ratio is up 1.4 percentage points.
Separately, Legal & General Investment Management America’s quarterly Pension Fiscal Fitness Monitor found the funding ratio for the typical U.S. corporate DB plan was 76.7% as of Sept. 30, up 1.1 percentage points over the third quarter as assets grew faster than liabilities. Plans with a 60% global equity and 40% aggregate fixed-income asset allocation saw assets increase 3.43% as global equities and the S&P 500 rose 5.43% and 3.85%, respectively, in the quarter. Liabilities were up 1.98% during the same period, driven by a six-basis-point drop in the discount rate to 3.54%.