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Aggregate funded ration for US corporate pension plans down two points in June

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The aggregate funded ratio for US corporate pension plans decreased by 1.8 percentage points to end the month of June at 76.1 per cent, the lowest point over the past 12 months and bringing its year-to-date decline to 5.3 percentage points, according to Wilshire Consulting.

The monthly change in funding resulted from a 3.5 percentage point increase in liability values partially offset by a 1.1 percentage point increase in asset values.  The year-to-date decrease in funding is the result of a 10.9 percentage point increase in liability values.
 
“Though non-US stocks posted negative returns in June, assets were up overall as fixed income assets posted their largest monthly gain since January 2015,” says Ned McGuire (pictured), vice president and a member of the Pension Risk Solutions Group of Wilshire Consulting. 
 
“The Wilshire 5000 Total Market Index gained 0.3 percentage points during the month recovering losses sustained after the British referendum vote to leave the European Union. Falling Treasury yields decreased the corporate bond yields used to value pension liabilities which led to a 3.5 percentage point increase in liability values of which over 2.5 percentage points occurred after the British referendum vote.”

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