U.S. corporate pension funding rises in August – 2 reports
Funding ratios for U.S. corporate pension plans increased in August, according to reports from Legal & General Investment Management America and Wilshire.
LGIMA found in its monthly pension solutions monitor that the funding ratio of a typical corporate pension plan increased by 1.6 percentage points to 90.8% in August primarily due to strong performance from global equities.
LGIMA estimated U.S. Treasury rates rose 3 basis points while credit spreads widened by 2 basis points, resulting in the average discount rate rising by 5 basis points.
Liabilities for the typical plan decreased 0.3%, while plan assets with a traditional 60% equity/40% bond asset allocation increased by about 1.4%, LGIMA said.
As measured by Wilshire, U.S. corporate pension plans’ aggregate funding ratio rose 1.2 percentage points to 94% in the month ended Aug. 31. The investment consulting firm attributed the change a 0.7-percentage-point decrease in liability values compounded by a 0.6-percentage-point increase in asset values.
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