Wilshire Consulting estimates the aggregate funded ratio for U.S. corporate pension plans fell by 0.9 percentage points during March 2014, reaching 81.5% by month’s end.
The decrease in funding was the result of a decrease in asset value versus an increase in liability value, says Ned McGuire, vice president and member of the pension risk solutions group of Wilshire Consulting.
“This decrease was driven by the decrease in asset value of 0.8% versus the 0.3% increase in liability value,” he adds. “The asset result is due to negative returns for equities, while the liability value increased due to the maturation of pension liabilities.”
The aggregate figures represent an estimate of the combined assets and liabilities of corporate pension plans sponsored by S&P 500 companies, Wilshire explains, with asset/liability duration in-line with the Citi Group Pension Liability Index – Intermediate. The Funded Ratio factors in service costs, benefit payments and contributions in-line with Wilshire’s 2015 corporate funding study. The most current month-end liability growth is estimated using the Barclays Long Aa+ U.S. Corporate Index.