Corporate pension plans likely saw a modest improvement in funded status in May, driven by continuing gains in equity markets and moderate declines in Treasury rates and credit spreads. Total-return plans with higher equity allocations may have outpaced LDI-focused plans, depending on the plan liability duration. Based on NEPC’s hypothetical open- and frozen-pension plans, the funded status of the total-return plan increased by 0.4%, while the LDI-focused plan rose 0.6%.

The funded status of the total-return plan rose 0.4% as strong equity performance continues to drive funded status upwards.

The funded status of the LDI-focused plan was up 0.6%, as gains from equities and credit exceeded liability growth. The plan is 88% hedged as of May 31.

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