Milliman recently reported findings of its pension plan index and stated that pension plan funding dropped by $7 billion in market value and had a $1 billion increase in pension liabilities in November. The drop occurred due to investment losses.
The Pension Funding Index involves 100 of the nation’s largest benefit plans and projects the funded status for pension plans in the Milliman Pension Funding study. The 4.53 percent discount and declining assets are the contributing factors to the deficit.
"So long as we have low discount rates, we’ll have no choice but to hope for improved asset performance," said John Ehrhardt, co-author of the Milliman Pension Funding Study.
According to the index, the cumulative asset return on these 100 pensions has been 2.27 percent and the Milliman 100 PFI funded status has decreased by $175 billion, dropping the funded ratio from 84.1 percent to 75.0 percent. The funded status deficit increased to $404 billion from $396 billion.
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