The funded status of the 100 largest corporate defined benefit pension plans dropped by $90 billion during January as measured by the Milliman 100 Pension Funding Index (PFI). The $90 billion funded status decline was the eighth largest monthly drop in the 15-year history of the Milliman 100 PFI. The funded status deficit ballooned from $292 billion to $382 billion since December 2014, which was due to a decline of 42 basis points in the benchmark corporate bond interest rates used to value pension liabilities. Pension assets had a monthly above-expected return that was due to strong fixed income asset return and this helped to counter liability losses. The funded ratio decreased from 83.5% to 79.6%.
PFI co-author Zorast Wadia discusses the index’s latest results on this Milliman Hangout.