Milliman analysis: Pension funded status
improves by $29 billion in March

The Wall Street Journal
By Milliman Inc.

Milliman, Inc., a premier global consulting and actuarial firm, today released the results of its latest Pension Funding Index (PFI), which consists of 100 of the nation’s largest corporate defined benefit pension plans. In March, these pensions experienced a $29 billion increase in funded status based on a $14 billion decrease in the pension benefit obligation (PBO) and a $15 billion increase in assets. The March improvement of $29 billion results in a cumulative improvement of $106 billion in the first quarter of 2013. Note that this latest PFI reflects the data from the annual update of the Milliman 100 companies’ 2012 financial figures included in Milliman’s 2013 Pension Funding Study, published on March 25. [EXPAND Read more]

“We’ve followed a record deficit at the end of 2012 with a record first quarter to open 2013,” said John Ehrhardt, co-author of the Milliman Pension Funding Study. “The funded ratio has gone from 77% at the end of last year to just under 83% at the end of the first quarter, which is about as strong of a rally as we could hope for in this persistent low-interest-rate environment.”

In March, the discount rate used to calculate pension liabilities increased from 4.16% to 4.22%, decreasing the PBO from $1.665 trillion to $1.651 trillion at the end of the month. The overall asset value for these 100 pensions increased from $1.351 trillion to $1.366 trillion.

Looking forward, if these 100 pension plans were to achieve their expected 7.5% median asset return and if the current discount rate of 4.22% were to be maintained throughout 2013 and 2014, their pension funded ratio would improve from 82.7% to 86.1% by the end of 2013 and to 91.3% by the end of 2014.

To view the complete study, go to To receive regular updates of Milliman’s pension funding analysis, contact us at

About Milliman

Milliman is among the world’s largest providers of actuarial and related products and services. The firm has consulting practices in healthcare, property & casualty insurance, life insurance and financial services, and employee benefits. Founded in 1947, Milliman is an independent firm with offices in major cities around the globe. It is a founding member of Abelica Global, an international organization of consulting firms serving employee benefits clients worldwide. For further information, visit

About the Milliman 100 Pension Funding Index

For the past 13 years, Milliman has conducted an annual study of the 100 largest defined benefit pension plans sponsored by U.S. public companies. The Milliman 100 Pension Funding Index projects the funded status for pension plans included in our study, reflecting the monthly impact of market returns and interest-rate changes on pension funded status, utilizing the actual reported asset values, liabilities, and asset allocations of the companies’ pension plans.

The results of the Milliman 100 Pension Funding Index were based on the actual pension plan accounting information disclosed in the footnotes to the companies’ annual reports for the preceding fiscal year and for previous fiscal years. In addition to providing the financial information on the funded status of U.S. qualified pension plans, the footnotes may also include figures for the companies’ nonqualified and foreign plans, both of which are often unfunded or subject to funding standards different from those for U.S. qualified pension plans. The results do not represent the funded status of the companies’ U.S. qualified pension plans under ERISA. [/EXPAND]