US Corporate Pensions Get Hit in 2020?

Michael Katz of Chief Investment Officer reports that the funded status of US corporate pensions dropped last year despite robust returns: Funding for the 100 largest corporate pension plans in the US declined $50 billion last year as their aggregate funding ratio slipped to 88.2% at the end of the year from 89.8% at the end of 2019, according to consulting firm Milliman. After sharp investment declines in the first quarter, asset returns rebounded strongly during the rest of the year. That rebound helped offset the funded status deterioration that was a result of the discount rates used to value pension liabilities continuing to fall. The funded status deficit of the 100 plans tracked by the Milliman 100 Pension Funding Index (PFI) was at $234 billion at the end of December, which was the lowest monthly funded status deficit during the year. The discount rates for the plans in the Milliman 100 fell 74 basis points (bps) to 2.46% at the end of 2020 from 3.2% at the end of