The funded status for a typical corporate plan rose 40 basis points to 89.9% from 89.5% in November as assets rose more than liabilities, said the BNY Mellon Institutional Scorecard. In another monthly report, Mercer said the funded status of S&P 500 companies with DB plans declined one percentage point to 83% from 84%. Meanwhile, Wilshire Consulting said the funded status of a typical pension plan remained the same at 84.8%.
Assets rose 1.5% in November, outpacing a 40-basis-point increase in liabilities, according to BNY Mellon. The growth in liabilities was the result of a six-basis-point drop in the discount rate to 4.14%.
Asset performance was fueled by U.S. large-cap equities, which returned 2.7% over the month, said Andrew D. Wozniak, head of fiduciary solutions of the investment strategy and solutions group within BNY Mellon Investment Management, in a telephone interview.
Year-to-date through Nov. 30, the typical corporate DB plan was down 5.3 percentage points from a high of 95.2% at the end of December.
Mr. Wozniak said the implementation of new mortality tables that reflect an increase in life expectancy could increase plan liabilities by 3% to 8% and drive funded status down further.
Mr. Wozniak said plan executives who are thinking about derisking should review their glidepaths in light of the new mortality assumptions. Liability-hedging portfolios could also be affected as the duration of liabilities increases, he added.
Separately, Mercer said the funded status of S&P 1500 companies with DB plans fell one percentage point to 83% from 84% the previous month as liabilities rose more than assets.
The discount rate fell 12 basis points to 3.86% in November, the lowest level since the beginning of the year. Equity markets returned 2.5% in November.
The collective estimated pension deficit of $384 billion at the end of November is up $17 billion from the end of October and up $148 billion from the end of December, Mercer said.
Estimated aggregate assets totaled $1.9 trillion as of Nov. 30, up 5.56% from Dec. 31. Estimated projected benefit obligations were $2.28 trillion, up 12.3% from the end of December.
Also, Wilshire Consulting said the funded status of a typical corporate pension plan remained the same at 84.8% in November. Wilshire Consulting is the institutional investment consulting and outsourced CIO unit of Wilshire Associates.
Assets and liabilities rose at comparable levels, holding funded status constant.
Year-to-date through November, the funded status of a typical corporate DB plan was down five percentage points from 89.8% as of Dec. 31, Wilshire estimates.
The figures are the result of estimates of combined assets and liabilities of S&P 500 firms that have defined benefit plans.
The estimated asset allocation is 33% domestic equity, 26% long-duration fixed income, 22% international equity, 17% core fixed income and 2% real estate.