Corporate pension plans generally experienced modest gains in funded status in August. Equities were in the black during the month, supporting asset growth, while liability values remained relatively stable amid limited movement in interest rates and credit spreads.
The discount rate for NEPC’s hypothetical total-return pension plan decreased three basis points to 6.13%, while the frozen LDI-focused plan’s discount rate fell two basis points to 5.92%. The funded status improved 1.3% for the total-return plan and 1.2% for the LDI-focused plan.
As a result of the gains from return seeking assets, many plans likely ended August with funded ratios modestly higher than at the beginning of the month, continuing the favorable funding trend observed throughout most of 2026.
Sources: FactSet, FTSE and Brentwood LLC, as of August 31, 2026
Rate Movement
Retiree Buyout Index
The Buyout Index for retirees is estimated to be approximately 106.1% of PBO, as of August 31, 2026.
Recent Insights from NEPC
Terminating a Pension Plan, Part 3: De-Risking Before Buyout | NEPC
Recent Corporate Pension Headlines
News on pension risk transfer (PRT) litigation continues to be favorable for plan sponsors. The ATI pension risk transfer (PRT) litigation was officially dismissed in late July. The case was initially recommended for dismissal in October 2025. Consistent with prior dismissals, plaintiffs could not prove actual harm. The judge noted that they only alleged that their benefits were at higher risk due to the selection of Athene but could not demonstrate a high likelihood that Athene would default on its obligations. In other PRT litigation updates, there was another push made for dismissal of the AT&T case, as recommended by a federal magistrate in Massachusetts. In this case, the magistrate highlighted AT&T’s use of an independent fiduciary as a key determinant of its selection of Athene rather than a direct brokering by AT&T.
Sources:
ATI dismissal: https://www.asppa-net.org/news/2026/8/judge-dismisses-pension-risk-transfer-suit/
AT&T push for dismissal: https://www.plansponsor.com/att-pension-risk-transfer-suit-is-pushed-for-dismissal-for-a-second-time/?utm_source=newsletter&utm_medium=email&utm_campaign=Newsdash&oly_enc_id=5356I9945023C1Z
