Corporate Pensions Improve by $93B in August, Second-largest Monthly Increase in 20 Years

Staff Report

Friday, September 11th, 2020

Milliman, Inc., a premier global consulting and actuarial firm, today released the results of its latest Pension Funding Index (PFI), which analyzes the 100 largest U.S. corporate pension plans.

In August, corporate pensions experienced the second-largest monthly funding increase in the past two decades, with a funded status improvement of $93 billion. In the 20-year history of the PFI, only July 2003's monthly increase of $203.8 billion was higher. Discount rates for the month jumped 28 basis points, from 2.26% at the end of July to 2.54% as of August 31, lowering the Milliman 100 PFI deficit to $293 billion. These plans saw a monthly asset gain of 0.94%, which increased the PFI asset value by $11 billion. As of August 31, the funded ratio for these plans rose to 85.1%, up from 81.1% at the end of July, reversing declines experienced during the previous four months.

"August was a great month for corporate pensions, as discount rates finally increased and the market value of assets improved as well – the fifth straight month of above-average investment returns," said Zorast Wadia, author of the Milliman 100 PFI. "The fact that the funded status improved by a near-record-setting amount of $93 billion only serves to underline how the low-discount rate environment has been a drag on these pensions in 2020."

Looking forward, under an optimistic forecast with rising interest rates (reaching 2.74% by the end of 2020 and 3.34% by the end of 2021) and asset gains (10.5% annual returns), the funded ratio would climb to 90% by the end of 2020 and 105% by the end of 2021.  Under a pessimistic forecast (2.34% discount rate by the end of 2020 and 1.74% by the end of 2021 and 2.5% annual returns), the funded ratio would decline to 83% by the end of 2020 and 76% by the end of 2021.

To view the complete Pension Funding Index, go to To see the 2020 Milliman Pension Funding Study, go to To receive regular updates of Milliman's pension funding analysis, contact us at