The aggregate funded status of the largest U.S. corporate pension plans fell in August, said reports from Wilshire Consulting and Legal & General Investment Management America.
According to Wilshire, the aggregate funding ratio for S&P 500 companies with corporate pension plans fell 90 basis points to 83.2% in August, the result of a 1.8% increase in liability values, which outpaced a 0.7% increase in asset values.
"August marks the fourth month of declines in funded ratios both year-to-date and in the past five months," said Ned McGuire, managing director and a member of the pension risk solutions group of Wilshire Consulting, in a news release. "August's funding decrease was driven by the increase in liability values resulting from a decline in corporate bond yields used to measure pension liabilities. The decrease in funding comes despite a 10th consecutive month of gains for the Wilshire 5000 Total Market index, its longest such streak in more than 20 years."
Year-to-date, the aggregate funded status is up 1.3 percentage points.
Separately, LGIMA found that the funded status of a typical U.S. corporate pension plan with a 60% allocation to global equity and 40% to core fixed income fell about 1 percentage point over the month to 82.9%.
The discount rate fell 11 basis points over the month, resulting in a 1.8% increase in liabilities, outpacing a 0.6% increase in assets, according to LGIMA.