The average funding ratio of 19 U.S. publicly listed corporations with more than $20 billion in global pension fund liabilities totaled 93.8% at the end of 2021, up from 86.2% at the start of the year, according to a report from Russell Investments.

The impressive increase in the average funding ratio for the “$20 billion club” was attributed primarily to an increase in the discount rate of about 35 basis points, said the report released Monday.

Positive investment returns also contributed to the improving funding ratio. The year 2021 represented only the second time in the past 15 years that corporate pension plans were able to benefit from positive returns and rising discount rates in the same calendar year, the report said. The other year was 2013.

The increase in funding ratio is also notable in that employer contributions were at their lowest level in all 18 years that Russell has tracked the data.

Contributions by the 19 corporations totaled $8 billion for 2021, well below the total of $19.8 billion recorded in 2020. Based on each company’s disclosed expectations for 2022, Russell says the total for this year will be likely even lower, at about $6.8 billion.

The report cites ongoing funding relief connected with the COVID-19 pandemic, expanded by the American Rescue Plan Act and extended with the Infrastructure Investment and Jobs Act, both in 2021, will likely keep company contributions very low.

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