The aggregate funding ratio for U.S. corporate defined benefit plans remained relatively unchanged in October, said reports from Mercer, Wilshire Consulting and Legal & General Investment Management America.
According to Mercer, the estimated aggregate funding ratio of defined benefit plans sponsored by S&P 1500 companies remained at 77% for the fourth consecutive month as negative equity markets offset rising discount rates.
The typical discount rate measured by the Mercer yield curve rose 20 basis points to 3.66% in October, while the S&P 500 index and the MSCI EAFE index returned -1.9% and -2.1%, respectively.
The estimated aggregate value of pension fund assets of S&P 1500 companies totaled $1.82 trillion as of Oct. 31, down 2.15% from Sept. 30, while estimated aggregate liabilities totaled $2.35 trillion, down 2.89% from Sept. 30.
In another monthly report, Wilshire Consulting found the aggregate funding ratio for pension plans sponsored by S&P 500 companies rose 50 basis points to 77.5% in October.
The monthly increase resulted from a 2.9% decrease in liability values vs. a 2.3% decrease in asset values in October.
According to LGIMA, funding ratios of the average U.S. corporate plan increased 90 basis points to 77.5% in October.
Liabilities for the average plan declined 2.4% over the month, the result of a 20-basis-point increase in the discount rate, while plan assets decreased 1.3%, LGIMA estimates.