September Slump for Corporate Pensions

October 3, 2014 ( - The aggregate funded ratio for U.S. corporate defined benefit (DB) pension plans slipped to 85% for the month of September, according to Wilshire Consulting. 

The decrease in funding was the result of a greater decline in asset values versus a smaller decline in liability value.

Overall, the asset value decreased by 2.7% on the heels of negative returns for most asset classes, while the liability value decreased by 2.5% during the month because of rising corporate bond yields, according to Jeff Leonard, managing director, Wilshire Associates, and head of the actuarial services group of Wilshire Consulting.  

Year to date, the funded ratio for the sample plan has decreased by 4.8%, from 89.8% to 85%. “This decrease was driven by the larger increase in liability value of 10.0 percent versus the 4.0 percent increase in asset value,” Leonard says.  

 Wilshire Consulting is a subsidiary of Wilshire Associates, a global investment consulting and services firm.