“The pattern of improvement paused last month owing to a dip in discount rates, but aggregate funded status remains near a four-year high as the long bull market continues to persist,” says Matt McDaniel, a partner in Mercer’s US Wealth business.
Data provided by LGIMA suggests the average U.S. pension plan’s funding ratio increased a full 2% during the month of April.
Despite two months in a row of funded status losses, most firms that track pension funding find the average funded status is still up for the year.
Institutions that track defined benefit (DB) plans’ funded ratios measured increases or decreases in funded status as high as 1%, but noted it could have been worse if not offset by higher liability discount rates.
Most firms that track DB plan funded status estimated between 1% to 3% improvement for the year.
Firms that track DB plan funding reported increases in the month ranging from 0.4% to 1.0%.