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March a Seesaw for DB Plans

Practice Management

March can be a tumultuous month. And in 2023, private-sector pension plans reflected the volatility of the transition from winter to spring.  

Funded Ratios and Status. Like the thermometer following a late snowstorm, funded ratios fell. Insight Investment reports that it dropped by 1.6 percentage points. The drop financial services firm Wilshire reported was not as sharp; they estimate that the aggregate funded ratio for corporate DB plans fell by 0.6 percentage points in March. The traditionally invested model plan that October Three tracks lost more than 1%, while the more conservative model plan they track lost less than 1% in March. Agilis also reported a “deterioration of funded status” in March. 

But the drop in the funded ratio in March did not necessarily translate to a low level of funded status, at least according to Wilshire and Insight Investment. Wilshire says that by the end of the month, it stood at 99.1%; Insight Investment says it was 102.3%

Liabilities. Both October Three and Wilshire report March warmth, with similar increases in pension liabilities in March: 3%-4% according to the former, and 3.4% according to the latter. Insight Investment reports nearly the same level of growth in liabilities in March: 2.9%. 

Agilis also reports that liabilities grew, and attributed the drop in funded status to that increase. Funded status for most DB plans fell as liability growth outpaced investment returns, they say. 

Asset value. Assets heated up in March too. Insight Investment reports a 1.4%  increase in assets; Wilshire reports almost double that at 2.7%, and October Three says that both the model plans it tracks showed asset growth of around 3% in March.