Corporate funds get a break; $257 billion remains unfunded

Assets for the 100 largest U.S. corporate pension plans rose a collective $12.9 billion in October to $1.59 trillion, outpacing their growing liabilities by $11.8 billion. The collective funding ratio of the plans rose to 86.1% from 85.4%. October's slight improvement was driven by asset gains as well as a relatively stable, yet low, interest rate environment, according to a report by Milliman Inc.

Milliman also noted that despite asset gains of more than 8% this year, plans have struggled to improve their funded status because of falling discount rates. October's pension benefit obligation measurement was calculated using a discount rate of 3.08%, which the consultant said was the second-lowest in its 19-year history of observations. The gap between plan assets and liabilities was measured at $257.4 billion as of Oct. 31. While that's an improvement from a $306.6 billion deficit at the end of August, the funding gap was $110.3 billion a year earlier.