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April 16, 2014 at 08:45 AM
The funded status of the country’s 100 biggest corporate defined benefit pension plans fell by $5 billion in March, as measured by the Milliman 100 Pension Funding Index.
The deficit increased to $266 billion from $261 billion at the end of February, owing to both a drop in the benchmark corporate bond interest rates used to value pension liabilities and flat asset returns during March.
The index reflects the monthly effect of market returns and interest-rate changes on constituents’ pension funded status, using the actual reported asset values, liabilities and asset allocations of the companies’ pension plans.
As of March 31, the funded ratio of the 100 plans stood at 84%, down from 84.3% at the end of February.
A meager investment gain of 0.3% for March kept the Milliman index asset value at just under $1.4 trillion, unchanged from the end of February.
By comparison, the 2014 Milliman Pension Funding Study reported that the monthly median expected investment return during 2013 was 0.6% (7.4% annualized).
