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

Santa Monica, Calif., December 3, 2024 – The aggregate funded ratio for U.S. corporate pension plans increased by an estimated 1.4 percentage points in November, ending the month at 103.5%, 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 2.2% increase in asset value partially offset by a 0.8% increase in liability value. Although the aggregate funded ratio is estimated to have decreased by 1.6% over the trailing twelve months, it is estimated to have increased by 7.7% year-to-date.

"November’s increase in funded status was primarily driven by positive asset returns across most asset classes, with the FT Wilshire 5000 Index^SM reaching an all-time high and delivering the best monthly return of 2024," commented Ned McGuire, Managing Director at Wilshire. “Corporate bond yields, which are used to value corporate pension liabilities, are estimated to have decreased by approximately10 basis points in November. This slight increase in liability values was more than offset by the larger increase in asset values, continuing the trend of monthly increases in funded status. As a result, November’s month-end aggregate funded ratio estimate remains above 100%," 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 yearend (FYE). All data for fiscal year 2023 is based on the 253 S&P500 Index constituents that maintain defined benefit pension plans as of year-end2023. 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 proxies 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 $1.5 trillion in assets and manages $124 billion in assets as of September 30, 2024. Wilshire is headquartered in the United States with offices worldwide. More information on Wilshire can be found at www.wilshire.com

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