Pension plan funding improves in June

The funded status of very large pension plans sponsored by public companies climbed in June as rising interest rates lowered the value of plan liabilities, according to a Milliman Inc. survey released Thursday.

Defined benefit plans offered by U.S. employers with the 100 largest pension programs were an average of 85.6% funded as of June 30, up from 84.1% funded as of May 31.

At the end of June, the plans had $1.449 trillion in assets and $1.692 trillion in liabilities, resulting in a funding deficit of $243 billion. That is a decrease of $36 billion compared with the end of May, when the funding shortfall was $279 billion.

“It's no coincidence that we've seen a related decrease in pension liabilities, with rising discount rates reducing liabilities by $92 billion year to date and contributing to a strong quarter for the 100 largest corporate pensions,“ John Ehrhardt, a Milliman principal and consulting actuary in New York, said in a statement.