Assets held in pension plans rose for the second consecutive month in April, with moderate investment gains of $37 billion offset by liability increases of roughly $14 billion for an overall increase of $23 billion in funded status.
For the year, pensions are at a 79.6% funded status, compared with a 78.2% reported at the end of 2008, according to Milliman Inc., a global consulting and actuarial company in Seattle.
The Milliman 100 Pension Funding Index of the largest defined benefit plans shows over the last 12 months the cumulative asset return has been negative 19.95%, resulting in a $272 billion decline in funded status.
If pensions have an expected return of 8.1% and a discount rate of 6.85% for the rest of this year, the funded status would rise to $239 billion, and a funded ratio of 80.1%, Milliman said. "We've had two consecutive positive months and have nearly reached 80% funded status, which is certainly encouraging," said John Ehrhardt, co-author of the index. "But we've got a long ways to go yet if we're to close the next 10%."