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A Mild Winter for DB Plans

Practice Management

Private-sector pension plans had a good start to the year, according to studies that say funding ratios improved in the first quarter of 2023. 

Both October Three and financial services firm Wilshire report that even though those plans lost ground in aggregate funded ratios in March, they nonetheless made overall progress since Jan. 1. 

More specifically, October Three — which tracks two model plans, one traditionally invested and the other more conservatively — reports that, even though the finances of its conservative plan fell slightly in March, they still showed a slight improvement in the first quarter. Its traditional plan had more dramatic results, losing more than 1% in March but still showing improvement of more than 1% for the first quarter. 

Wilshire reported even stronger results. They, too, found a slight decrease in the aggregate funded ratio in March — but still estimate that it improved by 1.6% in the quarter. 

NEPC reports that the funded status of most corporate pension plans improved in the first quarter. It tracks two plans — a total return plan and an LDI-focused plan — and says that the former improved by 2.8%, and the latter improved by 3.7%.

Wilshire Managing Director Ned McGuire, as well as Agilis, buttressed these results. Both noted that, regardless of “turmoil in the banking sector” and the consequent panic — as well as the effects of the merger of Credit Suisse and UBS — many financial markets had a positive first quarter.