Corporate pension plans likely saw modest increases in funded status in April, as equities continued to rally while Treasury rates fell slightly. LDI-focused plans that hedge interest-rate risk outpaced total-return plans, as liability-hedging assets provided protection from interest-rate declines. Based on NEPC’s hypothetical open- and frozen-pension plans, the funded status of the total-return plan increased by 0.5%, while the LDI-focused plan rose 1.2%.
The funded status of the total-return plan rose 0.5%, as an increase in estimated liability valuations was offset by a strong performance in equities.
The funded status of the LDI-focused plan was up 1.2%, as positive asset returns from equities and fixed income exceeded liability growth. The plan is 87% hedged, as of April 30.
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