In April, pension plan sponsors with allocations to global equities likely experienced an improvement in funded ratio. Funded status was only minimally impacted by changes in interest rates as discount rates were mostly flat as higher Treasury yields were offset by tighter corporate bond spreads. The funded status for the hypothetical total-return plan increased amid gains from return-seeking assets. The hypothetical LDI-focused plan saw a more modest increase in funded status. The Treasury yield curve shifted upwards over the month across all tenors; the 10- and 30-year yields increased to 4.40% and 4.97%, respectively.
The discount rate for NEPC’s hypothetical total-return pension plan rose one basis point to 5.80%, and the frozen LDI-focused plan increased two basis point to 5.58%. The total-return pension plan saw an increase in funded status of 5.10%, and funded status of the LDI-focused plan rose 3.20%.
We anticipate continued market volatility and the potential for market disruption. Plan sponsors should diligently monitor sources of change in funded status versus expectations, as equities and interest rates are likely to remain volatile. This includes closely observing interest-rate hedge ratios and allocating across the yield curve as interest rates change.
Sources: FactSet, FTSE and Brentwood LLC, as of April 30, 2026
Rate Movement
Retiree Buyout Index
The Buyout Index for retirees is estimated to be approximately 106.6% of PBO, as of April 30, 2026.
Recent Insights from NEPC
The Art of Terminating a Corporate Pension Plan – Part 2
Recent Corporate Pension Headlines
April marked a pause in any major news related to pension risk transfer litigation. Recent news for plan sponsors has been favorable with some notable dismissals though cases remain outstanding against four companies. In other pension litigation news, AT&T agreed to settle a class action lawsuit from 2020 alleging they shorted participants on their pension payments by using outdated mortality data.
Sources:
Cohen Milstein. (2026, April 13). AT&T Strikes Deal to End Suit Over Pension Mortality Data. https://www.cohenmilstein.com/att-strikes-deal-to-end-suit-over-pension-mortality-data/
