In August, corporate pension plans likely experienced gains in funded status as interest rates improved marginally and equity performance was broadly positive. Rising rates led to lower estimated liabilities and negative performance for fixed-income mandates. Total-return plans with larger equity allocations likely experienced greater improvement in funded status relative to LDI peers. Based on NEPC’s hypothetical open- and frozen-pension plans, the funded status of the total-return plan improved 2.4%, while the LDI-focused plan improved 1.7% last month.
The funded status of the total-return plan improved 2.4% as gains increased asset values and rising interest rates lowered liabilities.
The funded status of the LDI-focused plan improved 1.7%, also benefitting from market dynamics. Liability hedging muted some of the gains from rising Treasury rates. The plan is 87% hedged as of August 31.
We use cookies to provide the services and features offered on our website, and to improve our user experience. By using this website you agree to our use of these cookies as explained in our Privacy Statement.
