Robust returns of 13.4% for the 100 largest corporate pension plans in the US offset a 67-basis-point drop in the discount rate to raise the plans’ funded ratio to 88.4% last year from 87.5% at the end of 2019, according to consulting firm Milliman’s “2021 Corporate Pension Funding Study.”

The funded levels rebounded strongly during the second half of the year after the bottoming out at 81% in July.

“Corporate pensions demonstrated their resilience in 2020 amidst a turbulent year of market volatility, declining discount rates, and employer stressors,” Zorast Wadia, co-author of Milliman’s Pension Funding Study, said in a statement. “With a possible end in sight to the pandemic, and funding relief such as the CARES [Coronavirus Aid, Relief, and Economic Security] Act and now the American Rescue Plan Act of 2021 [ARPA], the outlook for these plans is much better than it was 12 months ago.”

According to the study, 19 of the plans had a funded ratio of at least 100%, up from 14 plans the previous year. However, because both assets and liabilities had nearly matching growth of 9% and 8%, respectively, the funding deficit grew by $919 million to end the year at $232 billion.

Contributions for the year rose to $34.6 billion from $33.6 billion in 2019; however, this was a far cry from 2017 and 2018 when plan sponsor contributions hit record highs of $61.8 billion and $59 billion, respectively. Only 10 employers contributed at least $1 billion in 2020, down from 13 in 2019, with the largest contribution coming from General Electric at $3.3 billion.

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