U.S. corporate plans’ funded status slips in November
Funding ratios for U.S. corporate pension plans decreased in November, according to reports from Legal & General Investment Management America, Insight Investment and Northern Trust Asset Management.
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LGIMA’s monthly pension solutions monitor showed that the funding ratio of a typical corporate pension plan decreased by roughly 1.6 percentage points to 90.1% in November, primarily because of poor equity performance and lower Treasury yields.
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LGIMA estimated that U.S. Treasury rates dropped 14 basis points for the month while credit spreads widened 12 basis points, resulting in the average discount rate dropping by roughly 2 basis points.
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Liabilities for the typical plan increased 0.5%, while plan assets with a traditional 60% equity/40% bond asset allocation decreased by about 1.3%, LGIMA said.
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