Pension plans sponsored by S&P 1500 companies maintained their 83% funded status last month, according to Mercer. The estimated aggregate deficit fell $1 billion from April to $391 billion as of May 31, the consulting firm noted.
Since 2016, the aggregate deficit has fallen $17 billion from $408 billion. Estimated aggregate assets for May for all plans in the S&P 1500 index were $1.9 trillion.
Mercer found that a decrease in discount rates was offset by positive equity markets. Typical discount rates fell 12 basis points to 3.82%, according to Mercer, while the S&P 500 index gained 1.2% and the MSCI EAFE index gained 3.1%.
“While interest rates are almost back down to pre-election levels, those plan sponsors who follow a glidepath investment strategy were more likely to take advantage of higher interest rates after the election than those plan sponsors that use more traditional investment strategies,” Jim Ritchie, a partner in Mercer’s Wealth business, said in a statement. “Interest rates initially spiked about 50 basis points after the election and have slowly declined since the beginning of the year.”