LGIMA found the funding ratio of a typical corporate pension plan fell by 0.9 percentage points to 73.5%, primarily driven by poor equity performance and widening credit spreads. LGIMA estimates U.S. Treasury rates decreased by 35 basis points, while credit spreads widened by 87 basis points, resulting in the average discount rate increasing by 52 basis points.
Liabilities for the typical plan decreased 7.2%, while plan assets with a traditional 60% equity/40% bond asset allocation decreased by roughly 8.3%, LGIMA said.
Wilshire's monthly report noted that the aggregate funding ratio for U.S. corporate plans decreased by 2.7 percentage points as of March 31 to 79.2% from Feb. 29. The monthly change in funding resulted from a 7.3-percentage-point decrease in asset values partially offset by a 4-percentage-point decrease in liability values.