Insights

Market turmoil continued in the second quarter as equities sold off 16% and interest rates jumped over 60 basis points as the Federal Reserve raised rates. Fears of entrenched inflation and a potential recession wreaked havoc in stocks while credit spreads widened. Asset levels of U.S. corporate pension plans declined as both equities and fixed income sold off. However, estimated plan liabilities fell significantly in the second quarter given the increase in Treasury yields and credit spreads. The funded status of a total-return plan increased 3.3% with lower allocations to long-duration fixed income, while the LDI-focused plan saw its funded status fall by 3.5%.