U.S. corporate pension funds enjoyed greater surpluses in their funding ratios in June thanks to strong investment returns during the month, according to the latest Milliman Pension Funding index.
As of June 30, the estimated funding ratio of the 100 largest U.S. corporate pension funds was 102.2%, up from 100.7% at the end of May and also marks a six-month increase from 101.9% at the end of 2022, according to the index.
"While June saw strong monthly investment returns and muted discount rate activity, over the second quarter the PFI plan assets declined an overall $6 billion while a 20-basis-point jump in discount rates caused liabilities to fall by $35 billion," said Zorast Wadia, principal and consulting actuary at Milliman and co-author of the pension funding index, in a news release Monday.
"The net result was a funded status improvement of $29 billion since the end of March, when the PFI funded ratio was only 100.1%," Mr. Wadia said.
Asset values rose to $1.346 trillion as of June 30 from $1.329 trillion a month earlier. Meanwhile, liabilities dipped slightly to $1.316 trillion as of June 30 from $1.32 trillion as of May 31. The slight drop in liability values came from a tiny increase in the discount rate to 5.2% as of June 30 from 5.19% a month earlier.