U.S. corporate pension plan funding continues to fall – reports
U.S. corporate defined benefit plan funding ratios continue to drop, primarily due to poor equity returns well offsetting declines in liability values, new reports show.
A quarterly report from MetLife Investment Management shows the estimated average funding ratio of companies in Russell 3000 that sponsor defined benefit plans was 98.5% as of June 30, down from 102.5% as of March 31
Stephen Mullin, head of long duration and LDI strategies at MetLife, said in the report that each of the asset classes the manager tracks for its estimate experienced losses in the second quarter.
MetLife’s average allocation for the tracked companies is 49% fixed income, 33% equities and 18% alternatives.
In a quarterly report from Northern Trust Asset Management, the estimated average funding ratio was 96.3% as of June 30, a drop from 98.2% as of March 31. The report cited falling asset values well offsetting a drop in liabilities that has resulted from the rise in interest rates.
In Wilshire Advisors’ monthly report, the aggregate funding ratio for U.S. corporate pension plans fell by 2.6 percentage points in June to 94.8% from 97.4% as of May 31.
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