NEPC’s monthly pension funded status monitor tracks the funded status of two hypothetical plans to gauge the impact of movements in markets, interest rates, and credit spreads on pension plans. The funded status of a corporate pension plans experienced marginal change during May. Gains were driven primarily by continued recovery in equity markets, as liabilities faced the negative impact of compressing credit spreads. The funded status for a typical total-return plan increased 0.5%, while an LDI-focused plan saw a decline of 0.4%, based on NEPC’s hypothetical open- and frozen-pension plans.

The funded status of the total-return plan increased by 0.5%, buoyed by the rebound in equities; however, gains were muted by increases in liabilities.

The LDI-focused plan experienced a 0.4% drop in funded status as gains from risk assets were unable to offset an increase in liabilities arising from contracting credit spreads. The plan is currently 75% hedged as of May 31.

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