U.S. Corporate Pension Plans Funding Status – May 2024

Santa Monica, Calif., June 4, 2024 – The aggregate funded ratio for U.S. corporate pension plans increased by an estimated 0.4 percentage points in May, ending the month at 100.6%, according to Wilshire, a diversified global financial services firm. Wilshire assists in providing a suite of OCIO and advisory services to some of the nation’s largest retirement plans which help fund the retirement of millions of Americans.

This month’s change in funded ratio resulted from a 2.6% increase in asset value partially offset by a 2.2% increase in liability value. The aggregate funded ratio is estimated to have increasedby 4.8, but declined by 0.6 percentage points year-to-date and over the trailing twelve months, respectively.

"May’s funded status increase resulted from postive returns for most asset classes, with the FT Wilshire 5000 Index^SM posting the second best performance since the beginning of the year," commented Ned McGuire, Managing Director at Wilshire. "Despite the decline in corporate bond yields used to value corporate pension liabilities increasing the liability value, the postive returns from most asset classes drove the estimated increase in aggregate funded ratio in May." added Mr. McGuire.

A 12-month review of the funded ratio follows:

The aggregate figures represent an estimate of the combined assets and liabilities of corporate pension plans sponsored by S&P 500 companies with a duration in line with the FTSE Pension Liability Index –Short. The funded ratio is based on the FTSE – Short Liability, with service cost, benefit payments and contributions in line with Wilshire’s 2024 corporate funding study. The most current month-end liability growth is estimated using a FTSE Pension Liability Index – Short duration matched weighting of the Barclays Long and Intermediate Aa+ U.S. Corporate Indices.

The Data

Wilshire’s practice is to collect data on U.S. pensions from 10-K filings for companies in the S&P 500 Index at fiscal year end (FYE). All data for fiscal year 2023 is based on the 253 S&P 500 Index constituents that maintain defined benefit pension plans as of year-end 2023.  The estimated monthly funded ratios are based on liabilities, service cost, benefit payments and contributions in line with Wilshire’s 2024 corporate funding study.

We should note that our estimated monthly funded status of U.S. corporate plans proxy private assets’ returns using publicly available benchmarks. This year, our methodology provided higher than actual realized asset returns due to the difference in returns between private assets compared to public markets and this change was reflected as of December 31, 2023.

About Wilshire

Wilshire is a leading global financial services firm and trusted partner to a diverse range of approximately 500 leading institutional investors and financial intermediaries. Our clients rely on us to improve investment outcomes for a better future. Wilshire advises on over $1.4 trillion in assets and manages $112 billion in assets as of December 31, 2023. Wilshire is headquartered in the United States with offices worldwide. More information on Wilshire can be found at www.wilshire.com

Important Information

Wilshire is a global financial services firm providing diverse services to various types of investors and intermediaries. Wilshire’s products, services, investment approach and advice may differ between clients and all of Wilshire’s products and services may not be available to all clients. For more information regarding Wilshire’s services, please see Wilshire’s ADV Part 2 available at www.wilshire.com/ADV.

This material is intended for informational purposes only and should not be construed as legal, accounting, tax, investment, or other professional advice. This material contains proprietary information of Wilshire. It may not be disclosed, reproduced, or otherwise distributed, in whole or in part, to any other person or entity without prior written permission from Wilshire.

This material represents the current opinion of Wilshire and is subject to change without notice. Wilshire assumes no duty to update any such opinions. Wilshire believes that the information obtained from third party sources contained herein is reliable, but has not undertaken to verify such information. Wilshire gives no representations or warranties as to the accuracy of such information, and accepts no responsibility or liability (including for indirect, consequential or incidental damages) for any error, omission or inaccuracy in such information and for results obtained from its use.

Unless otherwise noted, data and figures related to historical and current macroeconomic trends as well as company-specific developments are sourced from Bloomberg and Barclays.

Wilshire Advisors LLC (Wilshire) is an investment advisor registered with the SEC. Wilshire® is a registered service mark. All other trade names, trademarks, and/or service marks are the property of their respective holders.

Copyright© 2024 Wilshire. All rights reserved.

MM-554352 0624

‍