Corporate pensions improve funded status by $79 billion in October

Milliman released its latest monthly Pension Funding Index (PFI) today. The 100 corporate pensions tracked in the PFI experienced a second consecutive strong month, with funded status improving by $79 billion in October.

Pension and Investment has the story; here is an excerpt:

John Ehrhardt, Milliman principal, consulting actuary and co-author of the Milliman 100 Pension Funding Index, said in an interview that it was one of the more impressive two-month improvements since the inception of the index but that pension plans have “a long way to go” before reaching full funding. The pension plans were up a combined $67 billion in September.

“It’s almost two years before we get back to 100% funding,” he said, noting that if pensions can maintain a 12.1% annual return and steadily increasing interest rates from 5.25% to 6.5%, then the plans would reach full funding by summer 2012. October ended with a discount rate of 5.27%.

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