The aggregate funded ratio for U.S. corporate pension plans decreased by 0.4 percentage points to end the month of December at 85.4 per cent, but up 4.5 percentage points over the trailing twelve months, according to Wilshire Consulting.
The monthly change in funding resulted from a 1.6 per cent increase in liability values partially offset by a 1.1 per cent increase in asset values. The aggregate funded ratio was up 1.1 and 4.5 percentage points for the quarter and year-to-date, respectively.
“December ended three consecutive month of increases in funded ratios and is only the fourth month of funded ratio declines for the year,” says Ned McGuire (pictured), Managing Director and a member of the Pension Risk Solutions Group of Wilshire Consulting. “December’s decrease in funding was driven by the increase in liability values caused by the decrease in corporate bond yields used to determine liability values. However, December marks a record fourteenth consecutive month of gains for the Wilshire 5000 Total Market IndexSM, extending its longest such streak in more than thirty years, and is the record ninth positive year in a row,” he adds.
