U.S. Corporate Pension Plans Funding Status – August 2023

Santa Monica, Calif., September 7, 2023 – The aggregate funded ratio for U.S. corporate pension plans decreased by an estimated 0.1 percentage points in August, ending the month at 105.0%, according to Wilshire, a diversified global financial services firm. Through its suite of Outsourced Chief Investment Officer (OCIO) and advisory services, Wilshire assists in providing secure and safe retirements for millions of Americans, including those participating in some of the nation’s largest corporate and public retirement plans.

This month's change in funded ratio can be attributed to a 2.3% decrease in asset value, mostly offset by a 2.2% decrease in liability value. Over the year-to-date and trailing twelve-month periods, the aggregate funded ratio is estimated to have increased by 6.3% and 9.2%, respectively.

“After four consecutive months of funded status increases, August experienced a slight decrease. Despite the decrease in most asset classes ─ with international equity experiencing the worst monthly decrease since September 2022 ─ the liability value also decreased due to rising yields” stated Ned McGuire, Managing Director, Wilshire. “Despite the small decrease in August, the funded ratio for U.S. corporate plans remains near its peak on an aggregate basis” Mr. McGuire added.

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 2023 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 & Intermediate Aa+ U.S. Corporate Indices.

The assumed asset allocation is below:

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