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2017 starts with corporate funded status improvement of $9 billion

Staff Writer |
Milliman released the results of its latest Pension Funding Index (PFI), which analyzes the 100 largest U.S. corporate pension plans.

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The year 2017 opened optimistically with the funded status for these pension plans improving by $9 billion due to January's investment gain of 0.87% as well as a small rise in corporate bond rates used to value pension liabilities.

As a result, the funded ratio for these plans climbed 0.5% to 81.6% from 81.1% in December 2016.

Looking forward, under an optimistic forecast with rising interest rates (reaching 4.55% by the end of 2017 and 5.15% by the end of 2018) and asset gains (11.2% annual returns), the funded ratio would climb to 92% by the end of 2017 and 105% by the end of 2018.

Under a pessimistic forecast (3.45% discount rate at the end of 2017 and 2.85% by the end of 2018 and 3.2% annual returns), the funded ratio would decline to 75% by the end of 2017 and 69% by the end of 2018.


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