U.S. corporate pension plans are getting closer to full funded status, according to a monthly report from Milliman.
Milliman in its latest Pension Funding Index report estimates that the funding ratio among corporate plans jumped to 98.4% as of March 31 from 95.1% as of Feb. 28. A 24 basis-point rise in discount rates, to 3.12% from 2.88%, was the primary driver for the improvement in funded status, the report said.
"Discount rates have increased now for three months in a row, bringing full funding within reach for the 100 largest U.S. corporate pension plans," said Zorast Wadia, principal and consulting actuary at Milliman, in a news release. "The last time these plans had a funded ratio over 100% was in 2008, just before the global financial crisis."
The report noted this is the first time discount rates have exceeded 3% in the last 12 months.
The estimated projected benefit obligation for U.S. corporate plans fell to $1.789 trillion from $1.851 trillion thanks to those rising rates, while estimated assets remained at $1.76 trillion at the end of March, following flat returns for the month.
