Improved Pension Funding Status in April

April showered growth on private-sector pension funding, according to two recent reports.

Willis Towers Watson, in its Pension Index that gauges the performance of a hypothetical benchmark pension plan, says that its index rose in April, continuing a now nine-month trend, including the previous three months of 2021. The investment consulting firm NEPC, which measures the performance of two hypothetical plans—a total-return plan and an LDI-focused plan—reported “modest increases in funded status” in April.

The factors measured by Willis Towers Watson contributed to an overall increase in its Pension Index of 0.6% in April to 88.6%. For its part, NEPC reports that for both of the hypothetical accounts it monitors, growth in assets outpaced growth of liabilities; the gap was especially pronounced for the LDI-focused plan. Accordingly, NEPC says that the LDI-focused plan did more than twice as well as the total-return plan: the funded status of the former rose 1.2%, while that of the latter rose 0.5%.

Both attribute the April results to growth in equity returns and drops in Treasury rates. Willis Towers Watson reported that “ all equity classes” showed “robust” returns in April.