US Corporate Pensions See an Overall Investment Gain of 15.66% in 2019, but Funding Still Drops Due to Discount Rate Lows

Published: 08 Jan 2020

Milliman, Inc., a premier global consulting and actuarial firm, has released the year-end results of its latest Pension Funding Index (PFI), which analyzes the 100 largest U.S. corporate pension plans. In 2019, corporate pension funding ended down $30 billion for the year, with the funding ratio dropping from 89.4% at the end of 2018 to 89.0% as of December 31, 2019.

Plan assets outperformed expectations, posting an annual return of 15.66% and a gain of $174 billion. But record-low discount rates resulted in plan liabilities increasing as well, by $204 billion during 2019. As of December 31, the Milliman 100 discount rate had fallen 99 basis points, from 4.19% at the end of 2018 to 3.20% a year later. This marks the lowest year-end discount rate that has been recorded in the 19-year history of the Milliman 100 Pension Funding Index (PFI).

"For corporate pensions during 2019, the funded status environment was like trying to fill a bucket full of holes with water – funding levels would rise given superb asset gains but then quickly recede given offsetting liability movements attributable to ever-falling discount rates," said Zorast Wadia, author of the Milliman 100 PFI. "Looking ahead to 2020, many plan sponsors can expect to have a rise in pension expense given the funded status losses suffered by plans during 2019."

Looking forward, under an optimistic forecast with rising interest rates (reaching 3.80% by the end of 2020 and 4.40% by the end of 2021) and asset gains (10.6% annual returns), the funded ratio would climb to 104% by the end of 2020 and 121% by the end of 2021. Under a pessimistic forecast (2.60% discount rate at the end of 2020 and 2.00% by the end of 2021 and 2.6% annual returns), the funded ratio would decline to 82% by the end of 2020 and 76% by the end of 2021.

To view the complete Pension Funding Index, go to To see the 2019 Milliman Pension Funding Study, go to To receive regular updates of Milliman's pension funding analysis, contact us at

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