U.S. corporate pension funding ratios jumped in November thanks to positive market returns, according to three new reports.

First, Wilshire Advisors estimated the aggregate funding ratio of U.S. corporate plans reached 103.5% as of Nov. 30, an increase of 1.4 percentage points above the 102.1% funding ratio estimated by the firm as of Oct. 31.

“November’s increase in funded status was primarily driven by positive asset returns across most asset classes, with the FT Wilshire 5000 Index reaching an all-time high and delivering the best monthly return of 2024,” said Ned McGuire, managing director at Wilshire, in a news release Dec. 3. “Corporate bond yields, which are used to value corporate pension liabilities, are estimated to have decreased by approximately 10 basis points in November. This slight increase in liability values was more than offset by the larger increase in asset values, continuing the trend of monthly increases in funded status. As a result, November’s month-end aggregate funded ratio estimate remains above 100%.”

The increase in funding ratio was due specifically to a 2.2-percentage-point increase in asset values, partially offset by a 0.8-percentage-point increase in liability values.

In another monthly report, Legal & General Investment Management America estimated the average funding ratio of the typical U.S. corporate pension plan was 111.5% as of Nov. 30, up from 109.9% a month earlier.

LGIMA’s Pension Solutions Monitor said the increase was primarily due to the S&P 500 index and MSCI ACWI Total Gross index returning 5.9% and 3.8%, respectively, during November.

LGIMA said the funding ratio also increased because the rise in asset values offset a slight decrease in discount rates of 9 basis points in the month ended Nov. 30, which caused liability values to rise. The drop in discount rates was driven by the Treasury component falling 7 basis points and the credit component tightening by 2 basis points.

The monitor assumes a typical liability profile using a duration of 12 years and an asset allocation of 50% MSCI ACWI index and 50% Bloomberg U.S. Long Government/Credit index.

Finally, Aon said its estimated S&P 500 aggregate pension funding ratio rose to 102.4% as of Nov. 30 from 101.2% as of Oct. 31.

Aon said asset values rose during the period due primarily to the Russell 3000 index returning 6.7% and the Bloomberg U.S. Long Credit index returning 2.2% for the period.

The rise in asset values was partially offset by the 10-year Treasury yield dropping 10 basis points, while the interest rates used to discount pension liabilities fell by 6 basis points for the average corporate pension fund, according to Aon. That drop resulted in an increase in liability values.

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