Aggregate funded ratio of US corporate pension plans down almost 2.5 per cent in Jan, says Wilshire

The aggregate funded ratio for US corporate pension plans decreased by 2.3 percentage points in January to end the month at 86.3 per cent, according to Wilshire Consulting.

The monthly change in funding resulted from a 1.5 per cent increase in asset values and a 4.3 per cent increase in liability values. The aggregate funded ratio is estimated to have decreased by 2.8 percentage points over the trailing twelve months.

“January’s decrease in funded ratio was driven by the increase in liability value resulting from a nearly 40 basis point decrease in Treasury yields partially offset by a low double digit basis point increase in credit spreads,” says Ned McGuire, Managing Director and a member of the Investment Management & Research Group of Wilshire Consulting. “January’s decrease in funded ratio ended four consecutive months of funded ratio increases and began 2020 with the largest monthly decline in funding levels since August’s four percentage-point decline.”