Pension plan funding improves, but still less than March peak: Milliman

The funding levels of pension plans sponsored by large publicly held U.S. employers improved in October but were significantly less than earlier this year, Milliman Inc. said in an analysis released Friday.

Defined benefit plans offered by the 100 U.S. employers with the largest pension programs were on average 75.4% funded as of Oct. 31. That's up from 72.8% in September, though still lower than the 79.3% funding in August and 84.1% at the end of last year, according to the Seattle-based consulting and actuarial firm.

The plans’ funded status improved by $42 billion in October. The market value of plan assets climbed to $1.218 trillion in October from $1.174 trillion in September, fueled by gains in the equities markets. The value of plan liabilities stayed nearly the same, inching up to $1.616 trillion from $1.614 trillion.

Still, plan funding levels—battered by steep investment losses from June through September and declining interest rates used to value liabilities—remain significantly lower compared with earlier this year.

For example, the plans’ average funded status peaked in March, with an average funded ratio of 87.7%, according to Milliman.