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US Corporate Pension Funded Ratio Climbs to 92.9% in February

Despite weak returns, funded levels rise for the fifth consecutive month.
By Michael Katz


Funding for the 100 largest US corporate pension plans, as tracked by the Milliman 100 Pension Funding Index, improved by $67 billion in February as the plans’ aggregate funded ratio rose to 92.9% from 89.7%, thanks to a 26 basis point increase in the monthly discount rate. It was the fifth straight month funded ratios have improved.

A paltry investment gain of 0.13% during the month led to a $2 billion decline in the aggregate market value of plans to $1.733 trillion as of Feb. 28, while pension liabilities decreased to $1.866 trillion at the end of February from $1.935 trillion at the end of January.

During the 12 month-period between March 2020 and February 2021, the cumulative asset return for the plans was 11.82%, which helped the funded status deficit of the plans improve by $197 billion. Meanwhile, the funded ratio of the plans rose sharply during the same time period to 92.9% from 83%.

“The funded ratio for corporate pensions has climbed by nearly 10 percentage points over the past 12 months,” Zorast Wadia, author of the Milliman 100 PFI, said in a statement. “We’re finally seeing some good discount rate news for these plans, making up for the poor investment returns over the past two months.”

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Milliman projects that if the 100 plans in its index were to earn the expected 6.5% median asset return, and if the current discount rate of 2.88% was maintained through 2022, the plans’ funded status would increase to 96.3% by the end of 2021, and 100.7% by the end of 2022. The forecast assumes 2021 and 2022 aggregate annual contributions of $50 billion.

Under an optimistic forecast that assumes the plans will earn average annual asset returns of 10.5%, with interest rates will rising to 3.38% by the end of 2021 and 3.98% by the end of 2022, Milliman forecasts the funded ratio would climb to 106% by the end of 2021 and 125% by the end of 2022. However, under a pessimistic forecast that assumes 2.5% annual returns with the discount rate falling to 2.38% at the end of 2021 and 1.78% by the end of 2022, the funded ratio would drop to 87% by the end of 2021 and 80% by the end of 2022.

Related Stories:

US Corporate Pension Funded Ratio Climbs to 89.8% in January

Strong Investment Gains Fail to Boost US Corporate Pensions in 2020

US Corporate Pensions Funding Drops in 2020 Despite Robust Returns

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Home > Uncategorized > NextGen Nominations Open

NextGen Nominations Open

Nominate your brightest rising stars now through April 1.

By Staff Report


It’s been quite a year for all of us. Incredible skill, resourcefulness, grit, and leadership in the younger generation of CIOs-to-come certainly made many things possible. Now, it’s time for those in the know to extend a much-needed atta-girl or atta-boy, and to shine a spotlight on those who we think will likely rise to take the CIO seat one day.

We’re inviting asset owners and managers to champion the brightest rising stars of the industry through this nomination form.

From your nominations, CIO will select 25 future leaders to be profiled in candid Q&A’s that highlight their skills and interests. The top five will likely compete in a title round during our Dec. 7 Influential Investors Forum to be crowned that evening at our gala as NextGen of the Year.

Our last winners were Elizabeth Jourdan in 2019 and Carlos Rangel in 2018. NextGen replaced our Forty Under Forty list, which means candidates can be 29 to 49 years old, male or female, and from any allocation fund in the world. Additionally, nominees can be former Forty Under Forty or NextGen achievers but cannot repeat from 2020.

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Both asset owners and managers can make nominations, but those selected must work for asset owners. 

This is not just an ego boost for these individuals. As with our previous Forties, NextGens have been able to break the glass ceilings and enter the upper echelons of the industry. Make a good case for them, though, because there is a high volume of submissions.

A few examples of the paths of our rising stars, since they were featured as NextGens:

  • Carlos Rangel took the CIO seat at the W.K. Kellogg Foundation; 
  • Jenny Chan was the senior investment officer for the Doris Duke Charitable Foundation, an organization she worked at for 11 years, when she was named a 2018 NextGen. By that August, she had been named CIO of the Children’s Hospital of Philadelphia; 
  • Chaya Slain, now CIO of AdCap management, has a similar story; 
  • Benjamin Frede was promoted to senior portfolio manager–private equity and private credit at the Public School & Education Employee Retirement Systems of Missouri; 
  • Christie Hamilton moved to head of investments from investment director at Children’s Health; 
  • Thomas Lefler transitioned from director of absolute return at Raytheon to CIO at Eagle Advisors; 
  • Ruchit Shah was promoted to CIO at the Texas Treasury Safekeeping Trust Company;
  • Terence Thompson departed his position as investment manager at Blue Cross Blue Shield of Arizona to work as a director of investments at a single family office; 
  • Mark Shulgan is the new growth equity managing director at the Ontario Municipal Employees Retirement System (OMERS), after working as the senior portfolio manager for thematic investing at the Canada Pension Plan Investment Board (CPPIB) at the time of his profile; and 
  • Charles Wu was promoted to deputy CIO of Australia’s State Super

Nominations, of course, will be kept anonymous to provide the best experience possible. To nominate, please answer this questionnaire about who you think is the next big investment rock star. If more than one candidate comes to mind, feel free to feature multiple nominations in your answers, and please incorporate as much detail as possible in your responses.

A few rules:

  1. Nominees must be asset owners working in public or private pension plans, endowments or foundations, sovereign wealth funds, and/or single-family offices. (They cannot be asset managers, outsourced CIOs, or work in multi-family offices.)
  2. Nominees must be senior investment professionals in a CIO’s investment office or report to CIOs.
  3. Nominees must be under the age of 50.

The nomination process will close on April 1, 2021.

NOMINATE HERE

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