‘Modest’ Improvement for Corporate DB Funded Status

Private-sector defined benefit plans captured the beauty of spring in May, suggests a recent report. 

The investment consulting firm NEPC, which measures the performance of two hypothetical plans—a total-return plan and an LDI-focused plan—reported “modest improvement in funded status” in May.

NEPC reports that the funded status of the total-return plan it follows improved by 0.4% since April; that of the LDI-focused plan improved by 0.6%. This marks a reversal of the trend NEPC reported in April when the total-return plan’s improvement outstripped that of the LDI-focused plan. NEPC adds that the LDI plan was 88% hedged by the end of May.

NEPC attributes the improvement in funded status to sustained gains in equity markets and “moderate” declines in Treasury rates and credit spreads.