As of March 17th, LGIMA estimates that pension funding ratios decreased 9.2% year to date, with changes primarily attributed to negative global equity performance. Our calculations indicate the discount rate’s Treasury component fell by 83 bps while the credit component widened 112 bps, resulting in a net increase of 29 bps. Overall, liabilities for the average plan have decreased ~3.5% while plan assets with a traditional “60/40” asset allocation have declined ~14.1% year to date. Through March 16th, our calculations indicated a 13.6% decrease in funding ratio throughout 2020.
Bloomberg Barclays, LGIMA. Data as of March 17, 2020. Discount rates based on a blend of the Intercontinental Exchange US Pension Plan AAA-A and Intercontinental Exchange Mature US Pension. Plan AAA-A discount curves, For the average plan LGIMA assumes a 60% allocation to MSCI AC World and a 40% allocation to Barclays Aggregate.
Views and opinions expressed herein are as of March 2020 and may change based on market and other conditions. The material contained here is confidential and intended for the person to whom it has been delivered and may not be reproduced or distributed. The material is for informational purposes only and is not intended as a solicitation to buy or sell any securities or other financial instrument or to provide any investment advice or service. Legal & General Investment Management America, Inc. does not guarantee the timeliness, sequence, accuracy or completeness of information included. Past performance should not be taken as an indication or guarantee of future performance and no representation, express or implied, is made regarding future performance.