In October, 100 of the nation’s largest DB plans experienced a $31 billion increase in asset value and a $28 billion increase in pension liabilities, according to Milliman Inc’s Pension Fund Index. The pension funding deficit decreased to $126 billion at the end of October.

 “We faced a frightening funded status at this time last year, with the discount rate reaching 3.96%, one of the lowest in the 13-year history of this study,” said John Ehrhardt, co-author of the Milliman Pension Funding Index. “Twelve months and $392 billion worth of improvement later, we are on track to end the year better than 90% funded.”

Year-to-date, assets have improved by $107 billion and the projected benefit obligation has been reduced by $157 billion, resulting in a massive improvement in funded status and increasing the funded ratio to 91.9%.

Looking forward, if the Milliman 100 pension plans were to achieve the expected 7.5% median asset return for their pension portfolios, and if the current discount rate of 4.67% were maintained, funded status would improve, with the funded status deficit narrowing to $113 billion (92.7% funded ratio) by the end of 2013 and $27 billion (98.2% funded ratio) by the end of 2014.

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