Customize Consent Preferences

We use cookies to help you navigate efficiently and perform certain functions. You will find detailed information about all cookies under each consent category below.

The cookies that are categorized as "Necessary" are stored on your browser as they are essential for enabling the basic functionalities of the site. ... 

Always Active

Necessary cookies are required to enable the basic features of this site, such as providing secure log-in or adjusting your consent preferences. These cookies do not store any personally identifiable data.

No cookies to display.

Functional cookies help perform certain functionalities like sharing the content of the website on social media platforms, collecting feedback, and other third-party features.

No cookies to display.

Analytical cookies are used to understand how visitors interact with the website. These cookies help provide information on metrics such as the number of visitors, bounce rate, traffic source, etc.

No cookies to display.

Performance cookies are used to understand and analyze the key performance indexes of the website which helps in delivering a better user experience for the visitors.

No cookies to display.

Advertisement cookies are used to provide visitors with customized advertisements based on the pages you visited previously and to analyze the effectiveness of the ad campaigns.

No cookies to display.

US. Milliman analysis: Corporate pension funded ratio at 83.7% in June as discount rate hits historic low

Milliman, Inc., a premier global consulting and actuarial firm, today released the results of its latest Pension Funding Index (PFI), which analyzes the 100 largest U.S. corporate pension plans.

Despite solid investment returns, June’s PFI funded status worsened by $6 billion due to an 11 basis point drop in the monthly discount rate, from 2.76% in May to 2.65% for June. This month’s discount rate marks the lowest observed in the 20-year history of the Milliman PFI. The PFI funded ratio for the month stayed nearly flat, inching down from 83.8% to 83.7% as of June 30. Asset gains of $22 billion, thanks to a solid investment return of 1.66%, partially offset the funded status loss.

“June’s above-average stock market return caps a strong second quarter of gains, and offsets much of the losses experienced by corporate pensions during the first quarter,” said Zorast Wadia, author of the Milliman 100 PFI. “But with the discount rate hitting historic lows – and now moored below 3% for the third month in a row – even good investment returns were not enough to procure funding improvements during the second quarter of 2020.”

Looking forward, under an optimistic forecast with rising interest rates (reaching 2.95% by the end of 2020 and 3.55% by the end of 2021) and asset gains (10.5% annual returns), the funded ratio would climb to 91% by the end of 2020 and 106% by the end of 2021.

Under a pessimistic forecast (2.35% discount rate by the end of 2020 and 1.75% by the end of 2021 and 2.5% annual returns), the funded ratio would decline to 80% by the end of 2020 and 74% by the end of 2021.

Read more @PR Newswire