Investment Gains Fuel Pension Funded Status Improvement in October

November 7, 2011 ( – In October, Milliman, Inc.’s Pension Funding Index results show a $44 billion investment gain and a $2 billion increase in pension liabilities. 

The Pension Funding Index consists of 100 of the nation’s largest defined benefit pension plans. According to a press release, the $42 billion improvement in funded status comes in the wake of a $254 billion increase in pension funding deficit in the third quarter, which was the second worst financial quarter on record.

Year-to-date, the cumulative asset return on these 100 pensions has been 2.44% and the Milliman 100 PFI funded status has decreased by $170 billion, dropping the funded ratio from 84.1% to 75.4%.

“These pensions needed some positive news, and the 3.87% investment gain in October has provided welcome relief from the dismal results of the third quarter,” said John Ehrhardt, co-author of the Milliman Pension Funding Study. “But the interest rates that have driven these historic liabilities barely budged last month. The low-interest-rate-driven pension funding deficit continues to be the elephant in the room.”

To view the complete study, visit