SEATTLE, June 4, 2015 /PRNewswire/ — Milliman, Inc., a premier global consulting and actuarial firm, today released the results of its latest Pension Funding Index, which analyzes the 100 largest U.S. corporate pension plans. In May, these pension plans experienced a $31 billion increase in funded status based on a $3 billion decrease in asset values and a $34 billion decrease in pension liabilities. The funded status for these pensions increased from 82.6% to 84.1%.
“The second quarter of 2015 has reversed the losses we saw in the first quarter,” said John Ehrhardt, co-author of the Milliman 100 Pension Funding Index. “For the year these pensions have now experienced a $50 billion decrease in the funded status deficit, thanks to rising interest rates. The discount rate that determines pension liabilities is now at 3.97%, and getting back above 4% would continue to push pension funding in the right direction.”
Looking forward, under an optimistic forecast with rising interest rates (reaching 4.32% by the end of 2015 and 4.92% by the end of 2016) and asset gains (11.3% annual returns), the funded ratio would climb to 91% by the end of 2015 and 105% by the end of 2016. Under a pessimistic forecast with similar interest rate and asset movements (3.62% discount rate at the end of 2015 and 3.02% by the end of 2016 and 3.3% annual returns), the funded ratio would decline to 80% by the end of 2015 and 72% by the end of 2016.
To view the complete Pension Funding Index, go to http://us.milliman.com/PFI. To see the 2015 Milliman Pension Funding Study, go to http://us.milliman.com/PFS/. To receive regular updates of Milliman’s pension funding analysis, contact us at firstname.lastname@example.org.
Milliman is among the world’s largest providers of actuarial and related products and services. The firm has consulting practices in healthcare, property & casualty insurance, life insurance and financial services, and employee benefits. Founded in 1947, Milliman is an independent firm with offices in major cities around the globe. For further information, visit milliman.com.
About the Milliman Pension Funding Study
For the past 15 years, Milliman has conducted an annual study of the 100 largest defined benefit pension plans sponsored by U.S. public companies. The results of the Milliman 2015 Pension Funding Study are based on the pension plan accounting information disclosed in the footnotes to the companies’ annual reports for the 2014 fiscal year and for previous fiscal years. These figures represent the GAAP accounting information that public companies are required to report under Financial Accounting Standards Board Accounting Standards Codification Subtopics 715-20, 715-30, and 715-60. In addition to providing the financial information on the funded status of their U.S. qualified pension plans, the footnotes may also include figures for the companies’ nonqualified and foreign plans, both of which are often unfunded or subject to different funding standards from those for U.S. qualified pension plans. The information, data, and footnotes do not represent the funded status of the companies’ U.S. qualified pension plans under ERISA.
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SOURCE Milliman, Inc.