The funded status of most U.S. corporate pension plans increased in the fourth quarter, driven by strong asset class returns. With Treasury yields flattening and credit spreads inching higher, estimated plan liabilities based on long-duration fixed-income yields remained stable in the three months ended December 31. The equity market continued to see some spikes in volatility while continuing its march upwards. During the fourth quarter, the funded status of a total-return plan increased 4% and the LDI-focused plan funded status rose 4.5%.
The funded status of the total-return plan increased in the fourth quarter as equity markets marched upwards and the yield curve flattened.
The LDI-focused plan saw an increase in funded status in the fourth quarter as long rates fell and equities increased at quarter end. The plan is 89% hedged as of December 31.
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