Corporate pension plans likely experienced gains in funded status in October as equities rebounded from a challenging September. Interest rates rose marginally in the middle of the yield curve, but fell at the long end, leading to a flatter profile and mixed results for fixed-income mandates. Total-return plans with larger equity allocations, and more intermediate-duration fixed income likely experienced a smaller improvement in funded status relative to LDI-focused peers holding longer-duration assets. Based on NEPC’s hypothetical open- and frozen-pension plans, the funded status of the total-return plan increased 1.5%, while the LDI-focused plan improved 2.5% last month.

The funded status of the total-return plan improved 1.5% as equity market gains outpaced increasing liabilities.

The funded status of the LDI-focused plan improved 2.5%, also benefitting from equity market strength and gains from long-duration bonds. The plan is 87% hedged as of October 31.

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