March 8, 2016
February 2016 Pension Plan Funding Update
Highlights for February 2016
- Funded status dropped by 1.8% during February, after dropping 4.6% in January. Liabilities (12 yr duration) were up 1.7% in February and Assets (60 ACWI/40 AGG) were down -0.1%.
- Long Credit spreads narrowed by 5 bps and yields rose by 11 bps.
- Corporate credit and government bonds were both positive for the month around 80 bps.
Chart of the Month
- Liabilities have outperformed assets for seven out of the last eight months. The cumulative outperformance by liabilities since May 31, 2015 has been over 10%. The funded status decline is even worse when you factor in that most plans have realized an increase in liabilities due to the adoption of the new mortality tables.