The aggregate funded ratio for US corporate pension plans increased by 1.3 percentage points month-over-month in November to end the month at 84.0 per cent, according to Wilshire Associates (Wilshire), a diversified global financial services firm. Through its suite of Outsourced Chief Investment Officer (OCIO) and advisory services, Wilshire assists in ensuring secure and safe retirements for millions of Americans, including those participating in some of the nation’s largest corporate and public retirement plans.
November’s funded ratio resulted from a 6.3 percentage point increase in asset values partially offset by a 4.6 percentage point increase in liability values. Over longer periods, the aggregate funded ratio is estimated to have decreased by 3.1 and 5.4 percentage points year-to-date and over the trailing twelve months, respectively, primarily due to rising liability values.
“November’s funded ratio increase was primarily driven by double digit US and Non-US Public Equity and Real Estate monthly returns, with the Wilshire 5000 Total Market IndexSM posting multiple record highs stemming from optimism around a Covid-19 vaccine,” says Ned McGuire, Managing Director, Wilshire Associates. “November’s funded ratio increase reverses two consecutive monthly declines in funded ratio”.