Pension Funding Dips in February

March 7, 2013 ( – In February, the nation’s largest pensions experienced a $6 billion decrease in funded status, according to Milliman’s latest Pension Funding Index.
The Index of 100 of the nation’s largest corporate defined benefit pension plans shows a $17 billion increase in the pension benefit obligation (PBO) and an $11 billion increase in assets. February’s growth in the funded status deficit follows a near-record improvement of $107 billion in January and still leaves these pensions in better shape than at the end of 2012.  

In February, the discount rate used to calculate pension liabilities decreased from 4.45% to 4.40%, increasing the PBO from $1.666 trillion to $1.683 trillion at the end of the month. The overall asset value for these 100 pensions increased from $1.361 trillion to $1.372 trillion.   

Looking forward, if these 100 pension plans were to achieve their expected 7.8% median asset return and if the current discount rate of 4.40% were to be maintained throughout 2013 and 2014, their pension funded ratio would improve from 81.5% to 85.6% by the end of 2013 and to 90.6% by the end of 2014, Milliman projects.

Complete Index results can be viewed here.