Pension Solutions Monitor

US pension funding ratios increased throughout July

LGIM America's Pension Solutions Monitor, which estimates the health of a typical US corporate defined benefit pension plan, estimates that pension funding ratios increased through July 2023. Based on market movements, the average funding ratio is estimated to have increased from 103.5% to 104.9%.

Equity markets were strong throughout the month with Global Equities¹ increasing 3.7% and the S&P 500 increasing 3.2%. Plan discount rates² were estimated to have increased 5 basis points over the month with the Treasury component increasing 15 basis points and the credit component tightening 10 basis points. Plan assets with a traditional “50/50” asset allocation increased 1.3% while liabilities stayed relatively flat, resulting in a strong improvement in funding ratios by July month-end. The increase in equities outpaced liabilities to improve funding ratios throughout the month.

The Pension Solutions Monitor assumes a typical liability profile using an approximate duration of 12 years and 50% MSCI AC World Total Gross Index / 50% Bloomberg US Long Government/Credit Index. Our analysis incorporates data from LGIM America research, ICE indices and Bloomberg.

Pension funded status market summary: Equity markets delivered strong performance with Global Equities and the S&P 500 up. Plan liabilities stayed relatively the same over the month. Funding ratio levels improved as the outperformance in assets outpaced relatively steady liabilities.

Funded status risk July 2023   Equities ↑   Interest rates ↑   Credit spreads ↓   Sources: LGIM America, ICE indices and Bloomberg. Data as of July 31, 2023.

1. “Global equities” referred to here is represented by the MSCI AC World Total Gross Index.
2. Discount rates based on a blend of the Intercontinental Exchange Mature US Pension Plan AAA-A and Intercontinental Exchange Retired US Pension Plan AAA-A discount curves.

For educational purposes only.

This material is intended to provide only general educational information and market commentary. Views and opinions expressed herein are as of the date set forth above 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.

These results are based on simulated or hypothetical performance results that have certain inherent limitations. Unlike the results in an actual performance record, these results do not represent actual trading. Because these trades have not actually been executed, these results may have under‐ or over-compensated for the impact, if any, of certain market factors, such as lack of liquidity. Simulated or hypothetical trading programs in general are also subject to the fact that they are designed with the benefit of hindsight. No representation is being made that any account will or is likely to achieve profits or losses similar to these being shown.

Unless otherwise stated, references herein to "LGIM", "we" and "us" are meant to capture the global conglomerate that includes Legal & General Investment Management Ltd. (a U.K. FCA authorized adviser), LGIM International Limited (a U.S. SEC registered investment adviser and U.K. FCA authorized adviser), Legal & General Investment Management America, Inc. (a U.S. SEC registered investment adviser) and Legal & General Investment Management Asia Limited (a Hong Kong SFC registered adviser). The LGIM Stewardship Team acts on behalf of all such locally authorized entities.

US pension funding ratios increased through June

LGIM America's Pension Solutions Monitor, which estimates the health of a typical US corporate defined benefit pension plan, estimates that pension funding ratios increased through June 2023. Based on market movements, the average funding ratio is estimated to have increased from 100.7% to 103.5%.

Equity markets were strong throughout the month with Global Equities¹ increasing 5.9% and the S&P 500 increasing 6.6%. Plan discount rates² were estimated to have stayed roughly flat over the month with the Treasury component increasing 8 basis points and the credit component tightening 8 basis points. Plan assets with a traditional “50/50” asset allocation increased 3.3% while liabilities increased by 0.5%, resulting in a strong improvement in funding ratios by June month-end. The increase in equities outpaced the increase in liabilities to improve funding ratios throughout the month.

The Pension Solutions Monitor assumes a typical liability profile using an approximate duration of 12 years and 50% MSCI AC World Total Gross Index / 50% Bloomberg US Long Government/Credit Index. Our analysis incorporates data from LGIM America research, ICE indices and Bloomberg.

Pension funded status market summary: Equity markets delivered strong performance with Global Equities and the S&P 500 up. Plan liabilities stayed relatively the same over the month. Funding ratio levels improved as the outperformance in assets outpaced relatively steady liabilities.

Funded status risk June 2023   Equities ↑   Interest rates ↑   Credit spreads ↓   Sources: LGIM America, ICE indices and Bloomberg. Data as of June 30, 2023.

1. “Global equities” referred to here is represented by the MSCI AC World Total Gross Index.
2. Discount rates based on a blend of the Intercontinental Exchange Mature US Pension Plan AAA-A and Intercontinental Exchange Retired US Pension Plan AAA-A discount curves.

This material is intended to provide only general educational information and market commentary. Views and opinions expressed herein are as of the date set forth above 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.

These results are based on simulated or hypothetical performance results that have certain inherent limitations. Unlike the results in an actual performance record, these results do not represent actual trading. Because these trades have not actually been executed, these results may have under‐ or over-compensated for the impact, if any, of certain market factors, such as lack of liquidity. Simulated or hypothetical trading programs in general are also subject to the fact that they are designed with the benefit of hindsight. No representation is being made that any account will or is likely to achieve profits or losses similar to these being shown.

Unless otherwise stated, references herein to "LGIM", "we" and "us" are meant to capture the global conglomerate that includes Legal & General Investment Management Ltd. (a U.K. FCA authorized adviser), LGIM International Limited (a U.S. SEC registered investment adviser and U.K. FCA authorized adviser), Legal & General Investment Management America, Inc. (a U.S. SEC registered investment adviser) and Legal & General Investment Management Asia Limited (a Hong Kong SFC registered adviser). The LGIM Stewardship Team acts on behalf of all such locally authorized entities.

US pension funding ratios increased through May

LGIM America's Pension Solutions Monitor, which estimates the health of a typical US corporate defined benefit pension plan, estimates that pension funding ratios increased through May 2023. Based on market movements, the average funding ratio is estimated to have increased from 100.5% to 100.7%.

Equity markets were mixed throughout the month with Global Equities¹ decreasing 1.0% and the S&P 500 increasing 0.4%. Plan discount rates² were estimated to have increased roughly 26 basis points over the month with the Treasury component increasing 22 basis points and the credit component widening 4 basis points. Plan assets with a traditional “50/50” asset allocation decreased 1.9% while liabilities decreased by 2.1%, resulting in a slight improvement in funding ratios by May month-end. The drop in liabilities outweighed the lag in asset performance to improve funding ratios throughout the month.

The Pension Solutions Monitor assumes a typical liability profile using an approximate duration of 12 years and 50% MSCI AC World Total Gross Index / 50% Bloomberg US Long Government/Credit Index. Our analysis incorporates data from LGIM America research, ICE indices and Bloomberg.

 

Pension funded status market summary: Equity markets delivered mixed performance with global equities down while the S&P 500 was up. Plan liabilities decreased due to rising discount rates. Funding ratio levels slightly improved as the underperformance on the asset side was less than the decrease in liabilities.

Funded status risk May 2023   Equities Mixed   Interest rates ↑   Credit spreads ↑   Sources: LGIM America, ICE indices and Bloomberg. Data as of May 31, 2023.

1. “Global equities” referred to here is represented by the MSCI AC World Total Gross Index.
2. Discount rates based on a blend of the Intercontinental Exchange Mature US Pension Plan AAA-A and Intercontinental Exchange Retired US Pension Plan AAA-A discount curves.

This material is intended to provide only general educational information and market commentary. Views and opinions expressed herein are as of the date set forth above 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.

These results are based on simulated or hypothetical performance results that have certain inherent limitations. Unlike the results in an actual performance record, these results do not represent actual trading. Because these trades have not actually been executed, these results may have under‐ or over-compensated for the impact, if any, of certain market factors, such as lack of liquidity. Simulated or hypothetical trading programs in general are also subject to the fact that they are designed with the benefit of hindsight. No representation is being made that any account will or is likely to achieve profits or losses similar to these being shown.

Unless otherwise stated, references herein to "LGIM", "we" and "us" are meant to capture the global conglomerate that includes Legal & General Investment Management Ltd. (a U.K. FCA authorized adviser), LGIM International Limited (a U.S. SEC registered investment adviser and U.K. FCA authorized adviser), Legal & General Investment Management America, Inc. (a U.S. SEC registered investment adviser) and Legal & General Investment Management Asia Limited (a Hong Kong SFC registered adviser). The LGIM Stewardship Team acts on behalf of all such locally authorized entities.

US pension funding ratios increased through April

LGIM America's Pension Solutions Monitor, which estimates the health of a typical US corporate defined benefit pension plan, estimates that pension funding ratios increased through April 2023. Based on market movements, the average funding ratio is estimated to have increased from 100.3% to 100.5%.

Equity markets rallied through the month with Global Equities¹ and the S&P 500 increasing 1.5% and 1.6%, respectively. Plan discount rates² were estimated to have decreased roughly 5 basis points over the month with the Treasury component decreasing 3 basis points and the credit component decreasing 2 basis points. Plan assets with a traditional “50/50” asset allocation increased 1.1% while liabilities increased by 0.9%, resulting in a slight improvement in funding ratios by April month-end. The combination of stronger asset performance and rising liability values kept funding ratios relatively unchanged throughout the month.

The Pension Solutions Monitor now assumes a typical liability profile using an approximate duration of 12 years and a 50% MSCI AC World Total Gross Index / 50% Bloomberg US Long Government/Credit Index investment strategy. Our analysis incorporates data from LGIM America research, ICE indices and Bloomberg.

Pension funded status market summary: Equity markets delivered moderate performance with global equities up roughly 1.5%. Plan liabilities increased due to falling discount rates. Funding ratio levels were relatively unchanged as the performance on the asset side was offset by the rise in liabilities.

Funded status risk Mar 2023   Equities ↑   Interest rates ↓   Credit spreads ↓   Sources: LGIM America, ICE indices and Bloomberg. Data as of April 30, 2023.

1. “Global equities” referred to here is represented by the MSCI AC World Total Gross Index.
2. Discount rates based on a blend of the Intercontinental Exchange Mature US Pension Plan AAA-A and Intercontinental Exchange Retired US Pension Plan AAA-A discount curves.

This material is intended to provide only general educational information and market commentary. Views and opinions expressed herein are as of the date set forth above 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.

These results are based on simulated or hypothetical performance results that have certain inherent limitations. Unlike the results in an actual performance record, these results do not represent actual trading. Because these trades have not actually been executed, these results may have under‐ or over-compensated for the impact, if any, of certain market factors, such as lack of liquidity. Simulated or hypothetical trading programs in general are also subject to the fact that they are designed with the benefit of hindsight. No representation is being made that any account will or is likely to achieve profits or losses similar to these being shown.

Unless otherwise stated, references herein to "LGIM", "we" and "us" are meant to capture the global conglomerate that includes Legal & General Investment Management Ltd. (a U.K. FCA authorized adviser), LGIM International Limited (a U.S. SEC registered investment adviser and U.K. FCA authorized adviser), Legal & General Investment Management America, Inc. (a U.S. SEC registered investment adviser) and Legal & General Investment Management Asia Limited (a Hong Kong SFC registered adviser). The LGIM Stewardship Team acts on behalf of all such locally authorized entities.

LGIM America's Pension Solutions Monitor, which estimates the health of a typical US corporate defined benefit pension plan, estimates that pension funding ratios increased through March 2023. Based on market movements, the average funding ratio is estimated to have increased from 99.9% to 100.3%.

Equity markets rallied through the month with Global Equities¹ and the S&P 500 increasing 3.2% and 3.7%, respectively. Plan discount rates² were estimated to have decreased roughly 30 basis points over the month with the Treasury component decreasing 34 basis points and the credit component widening 4 basis points. Plan assets with a traditional “50/50” asset allocation increased 3.8% while liabilities increased by 3.4%, resulting in a slight improvement in funding ratios by March month-end. The combination of stronger asset performance and rising liability values kept funding ratios relatively unchanged throughout the month.

The Pension Solutions Monitor now assumes a typical liability profile using an approximate duration of 12 years and a 50% MSCI AC World Total Gross Index / 50% Bloomberg US Long Government/Credit Index investment strategy. Our analysis incorporates data from LGIM America research, ICE indices and Bloomberg.

 

Pension funded status market summary: Equity markets delivered strong performance with global equities up roughly 3.2%. Plan liabilities increased due to falling discount rates. Funding ratio levels were relatively unchanged as the performance on the asset side was offset by the rise in liabilities.

Funded status risk Mar 2023 Equities ↑ Interest rates ↓ Credit spreads ↑ Sources: LGIM America, ICE indices and Bloomberg. Data as of March 31, 2023.

1. “Global equities” referred to here is represented by the MSCI AC World Total Gross Index.
2. Discount rates based on a blend of the Intercontinental Exchange Mature US Pension Plan AAA-A and Intercontinental Exchange Retired US Pension Plan AAA-A discount curves.

This material is intended to provide only general educational information and market commentary. Views and opinions expressed herein are as of the date set forth above 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.

These results are based on simulated or hypothetical performance results that have certain inherent limitations. Unlike the results in an actual performance record, these results do not represent actual trading. Because these trades have not actually been executed, these results may have under‐ or over-compensated for the impact, if any, of certain market factors, such as lack of liquidity. Simulated or hypothetical trading programs in general are also subject to the fact that they are designed with the benefit of hindsight. No representation is being made that any account will or is likely to achieve profits or losses similar to these being shown.

Unless otherwise stated, references herein to "LGIM", "we" and "us" are meant to capture the global conglomerate that includes Legal & General Investment Management Ltd. (a U.K. FCA authorized adviser), LGIM International Limited (a U.S. SEC registered investment adviser and U.K. FCA authorized adviser), Legal & General Investment Management America, Inc. (a U.S. SEC registered investment adviser) and Legal & General Investment Management Asia Limited (a Hong Kong SFC registered adviser). The LGIM Stewardship Team acts on behalf of all such locally authorized entities.

LGIM America's Pension Solutions Monitor, which estimates the health of a typical US corporate defined benefit pension plan, estimates that pension funding ratios increased through February 2023. Based on market movements, the average funding ratio is estimated to have increased from 99.8% to 99.9%.

Equity markets sold off through the month with Global Equities¹ and the S&P 500 decreasing 2.8% and 2.4%, respectively. Plan discount rates² were estimated to have increased roughly 46 basis points over the month with the Treasury component increasing 38 basis points and the credit component widening 8 basis points. Plan assets with a traditional “50/50” asset allocation decreased 3.9% while liabilities decreased by 4.1%, resulting in a 0.1% increase in funding ratios by February month-end. The combination of weaker asset performance and falling liability values due to rising discount rates kept funding ratios relatively unchanged throughout the month.

The Pension Solutions Monitor now assumes a typical liability profile using an approximate duration of 12 years and 50% MSCI AC World Total Gross Index / 50% Bloomberg US Long Government/Credit Index investment strategy. Our analysis incorporates data from LGIM America research, ICE indices and Bloomberg.

 

Pension funded status market summary: Equity markets delivered weak performance with global equities down roughly 2.8%. Plan liabilities decreased due to rising discount rates. Funding ratio levels were relatively unchanged as the underperformance in equities was offset by the drop in liabilities.

Funded status risk Feb 2023 Equities ↓ Interest rates ↑ Credit spreads ↑ Sources: LGIM America, ICE indices and Bloomberg. Data as of February 28, 2023.

1. “Global equities” referred to here is represented by the MSCI AC World Total Gross Index.
2. Discount rates based on a blend of the Intercontinental Exchange Mature US Pension Plan AAA-A and Intercontinental Exchange Retired US Pension Plan AAA-A discount curves.

This material is intended to provide only general educational information and market commentary. Views and opinions expressed herein are as of the date set forth above 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.

These results are based on simulated or hypothetical performance results that have certain inherent limitations. Unlike the results in an actual performance record, these results do not represent actual trading. Because these trades have not actually been executed, these results may have under‐ or over-compensated for the impact, if any, of certain market factors, such as lack of liquidity. Simulated or hypothetical trading programs in general are also subject to the fact that they are designed with the benefit of hindsight. No representation is being made that any account will or is likely to achieve profits or losses similar to these being shown.

Unless otherwise stated, references herein to "LGIM", "we" and "us" are meant to capture the global conglomerate that includes Legal & General Investment Management Ltd. (a U.K. FCA authorized adviser), LGIM International Limited (a U.S. SEC registered investment adviser and U.K. FCA authorized adviser), Legal & General Investment Management America, Inc. (a U.S. SEC registered investment adviser) and Legal & General Investment Management Asia Limited (a Hong Kong SFC registered adviser). The LGIM Stewardship Team acts on behalf of all such locally authorized entities.

LGIM America's Pension Solutions Monitor, which estimates the health of a typical US corporate defined benefit pension plan, estimates that pension funding ratios increased through January 2023. Based on market movements, the average funding ratio is estimated to have increased from 98.3% to 99.8%.

Equity markets rallied through the month with Global Equities¹ and the S&P 500 gaining 7.2% and 6.3%, respectively. Plan discount rates² were estimated to have decreased roughly 47 basis points over the month with the Treasury component decreasing 37 basis points and the credit component tightening 10 basis points. Given broad-based asset allocation shifts from the market these last few years, we've adjusted the standard pension portfolio from a 60/40 equities/credit allocation to a 50/50 asset allocation. Plan assets with our recalibrated traditional “50/50” asset allocation increased 6.9% while liabilities increased by only by 5.3%, resulting in a 1.5% increase in funding ratios by January month-end. Strong equity performance overcame increases in plan liabilities, resulting in an increase in the average funding ratio.

The Pension Solutions Monitor now assumes a typical liability profile using an approximate duration of 12 years and 50% MSCI AC World Total Gross Index / 50% Bloomberg US Long Government/Credit Index investment strategy. Our analysis incorporates data from LGIM America research, ICE indices and Bloomberg.

 

Pension funded status market summary: Equity markets delivered strong performance with global equities up roughly 7.2%. Plan liabilities increased due to falling discount rates. Funding ratio levels increased as the outperformance in equities outweighed the increase in liabilities.

Funded status risk Jan 2023 Equities ↑ Interest rates ↓ Credit spreads ↓ Sources: LGIM America, ICE indices and Bloomberg. Data as of January 31, 2023.

1. “Global equities” referred to here is represented by the MSCI AC World Total Gross Index.
2. Discount rates based on a blend of the Intercontinental Exchange Mature US Pension Plan AAA-A and Intercontinental Exchange Retired US Pension Plan AAA-A discount curves.

This material is intended to provide only general educational information and market commentary. Views and opinions expressed herein are as of the date set forth above 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.

These results are based on simulated or hypothetical performance results that have certain inherent limitations. Unlike the results in an actual performance record, these results do not represent actual trading. Because these trades have not actually been executed, these results may have under‐ or over-compensated for the impact, if any, of certain market factors, such as lack of liquidity. Simulated or hypothetical trading programs in general are also subject to the fact that they are designed with the benefit of hindsight. No representation is being made that any account will or is likely to achieve profits or losses similar to these being shown.

Unless otherwise stated, references herein to "LGIM", "we" and "us" are meant to capture the global conglomerate that includes Legal & General Investment Management Ltd. (a U.K. FCA authorized adviser), LGIM International Limited (a U.S. SEC registered investment adviser and U.K. FCA authorized adviser), Legal & General Investment Management America, Inc. (a U.S. SEC registered investment adviser) and Legal & General Investment Management Asia Limited (a Hong Kong SFC registered adviser). The LGIM Stewardship Team acts on behalf of all such locally authorized entities.

LGIM America's Pension Solutions Monitor, which estimates the health of a typical US corporate defined benefit pension plan, estimates that pension funding ratios decreased through December 2022. Based on market movements, the average funding ratio is estimated to have decreased from 100.2% to 98.3%.

Equity markets had a weak month with Global Equities¹ and the S&P 500 dropping 3.9% and 5.8%, respectively. Plan discount rates² were estimated to have increased roughly 11 basis points over the month with the Treasury component increasing 15 basis points and the credit component tightening 4 basis points. Plan assets with a traditional “60/40” asset allocation decreased 2.5% while liabilities decreased by 0.6% resulting in a 1.9% decrease in funding ratios by December month-end. The impact of higher discount rates weighed on liability values; however, asset performance declined further over the month, resulting in the moderate decrease in funding ratios.

The Pension Solutions Monitor assumes a typical liability profile using an approximate duration of 12 years and 60% MSCI AC World Total Gross Index/40% Bloomberg US Aggregate Index (“60/40”) investment strategy, and incorporates data from LGIM America research, ICE indices and Bloomberg.

Pension funded status market summary: Equity markets delivered weak performance with global equities down roughly 3.9%. Plan liabilities decreased due to rising discount rates. Funding ratio levels decreased as the underperformance in plan assets outweighed the drop in liabilities.

Funded status risk Dec 2022 Equities ↓ Interest rates ↑ Credit spreads ↓ Sources: LGIM America, ICE indices and Bloomberg. Data as of December 30, 2022.

1. “Global equities” referred to here is represented by the MSCI AC World Total Gross Index.
2. Discount rates based on a blend of the Intercontinental Exchange Mature US Pension Plan AAA-A and Intercontinental Exchange Retired US Pension Plan AAA-A discount curves.

This material is intended to provide only general educational information and market commentary. Views and opinions expressed herein are as of the date set forth above 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.

These results are based on simulated or hypothetical performance results that have certain inherent limitations. Unlike the results in an actual performance record, these results do not represent actual trading. Because these trades have not actually been executed, these results may have under‐ or over-compensated for the impact, if any, of certain market factors, such as lack of liquidity. Simulated or hypothetical trading programs in general are also subject to the fact that they are designed with the benefit of hindsight. No representation is being made that any account will or is likely to achieve profits or losses similar to these being shown.

Unless otherwise stated, references herein to "LGIM", "we" and "us" are meant to capture the global conglomerate that includes Legal & General Investment Management Ltd. (a U.K. FCA authorized adviser), LGIM International Limited (a U.S. SEC registered investment adviser and U.K. FCA authorized adviser), Legal & General Investment Management America, Inc. (a U.S. SEC registered investment adviser) and Legal & General Investment Management Asia Limited (a Hong Kong SFC registered adviser). The LGIM Stewardship Team acts on behalf of all such locally authorized entities.

LGIM America's Pension Solutions Monitor, which estimates the health of a typical US corporate defined benefit pension plan, estimates that pension funding ratios decreased through November 2022. Based on market movements, the average funding ratio is estimated to have changed from 100.7% to 100.2%.

Equity markets had a strong month with Global Equities¹ and the S&P 500 rising 7.8% and 5.6%, respectively. Plan discount rates² were estimated to have decreased roughly 62 basis points over the month with the Treasury component decreasing 43 basis points and the credit component tightening 19 basis points. Plan assets with a traditional “60/40” asset allocation increased 6.1% and liabilities rose by 6.7%.

The Pension Solutions Monitor assumes a typical liability profile using an approximate duration of 12 years and 60% MSCI AC World Total Gross Index/40% Bloomberg US Aggregate Index (“60/40”) investment strategy, and incorporates data from LGIM America research, ICE indices and Bloomberg.

Pension funded status market summary: Equity markets outperformed with global equities up 7.8%. Plan liabilities increased due to falling discount rates. Funding ratio levels decreased slightly as the increase in liabilities outweighed positive asset performance.

Funded status risk Nov 2022 Equities ↑ Interest rates ↓ Credit spreads ↓ Sources: LGIM America, ICE indices and Bloomberg. Data as of November 30, 2022.

1. “Global equities” referred to here is represented by the MSCI AC World Total Gross Index.
2. Discount rates based on a blend of the Intercontinental Exchange Mature US Pension Plan AAA-A and Intercontinental Exchange Retired US Pension Plan AAA-A discount curves.

This material is intended to provide only general educational information and market commentary. Views and opinions expressed herein are as of the date set forth above 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.

These results are based on simulated or hypothetical performance results that have certain inherent limitations. Unlike the results in an actual performance record, these results do not represent actual trading. Because these trades have not actually been executed, these results may have under‐ or over-compensated for the impact, if any, of certain market factors, such as lack of liquidity. Simulated or hypothetical trading programs in general are also subject to the fact that they are designed with the benefit of hindsight. No representation is being made that any account will or is likely to achieve profits or losses similar to these being shown.

Unless otherwise stated, references herein to "LGIM", "we" and "us" are meant to capture the global conglomerate that includes Legal & General Investment Management Ltd. (a U.K. FCA authorized adviser), LGIM International Limited (a U.S. SEC registered investment adviser and U.K. FCA authorized adviser), Legal & General Investment Management America, Inc. (a U.S. SEC registered investment adviser) and Legal & General Investment Management Asia Limited (a Hong Kong SFC registered adviser). The LGIM Stewardship Team acts on behalf of all such locally authorized entities.

LGIM America's Pension Solutions Monitor, which estimates the health of a typical US corporate defined benefit pension plan, estimates that pension funding rose through October 2022. Based on market movements, the average funding ratio is estimated to have changed from 95.6% to 100.7%.

Equity markets had a strong month with Global Equities¹ and the S&P 500 rising 6.1% and 8.1%, respectively. Plan discount rates² were estimated to have increased roughly 27 basis points over the month with the Treasury component increasing 36 basis points and the credit component tightening 9 basis points. Plan assets with a traditional “60/40” asset allocation increased 3.1% and liabilities fell by 2.1%.

The Pension Solutions Monitor assumes a typical liability profile using an approximate duration of 12 years and 60% MSCI AC World Total Gross Index/40% Bloomberg Barclays US Aggregate Index (“60/40”) investment strategy, and incorporates data from LGIM America research, ICE indices and Bloomberg.

Pension funded status market summary: Equity markets outperformed with global equities up 6.1%. Plan liabilities decreased due to rising discount rates. Funding ratio levels increased due to strong asset performance and a decrease in liabilities.

Funded status risk Oct 2022 Equities ↑ Interest rates ↑ Credit spreads ↓ Sources: LGIM America, ICE indices and Bloomberg. Data as of October 31, 2022.

 

1. “Global equities” referred to here is represented by the MSCI AC World Total Gross Index.
2. Discount rates based on a blend of the Intercontinental Exchange Mature US Pension Plan AAA-A and Intercontinental Exchange Retired US Pension Plan AAA-A discount curves.

This material is intended to provide only general educational information and market commentary. Views and opinions expressed herein are as of the date set forth above 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.

These results are based on simulated or hypothetical performance results that have certain inherent limitations. Unlike the results in an actual performance record, these results do not represent actual trading. Because these trades have not actually been executed, these results may have under‐ or over-compensated for the impact, if any, of certain market factors, such as lack of liquidity. Simulated or hypothetical trading programs in general are also subject to the fact that they are designed with the benefit of hindsight. No representation is being made that any account will or is likely to achieve profits or losses similar to these being shown.

Unless otherwise stated, references herein to "LGIM", "we" and "us" are meant to capture the global conglomerate that includes Legal & General Investment Management Ltd. (a U.K. FCA authorized adviser), LGIM International Limited (a U.S. SEC registered investment adviser and U.K. FCA authorized adviser), Legal & General Investment Management America, Inc. (a U.S. SEC registered investment adviser) and Legal & General Investment Management Asia Limited (a Hong Kong SFC registered adviser). The LGIM Stewardship Team acts on behalf of all such locally authorized entities.

LGIM America's Pension Solutions Monitor, which estimates the health of a typical US corporate defined benefit pension plan, estimates that pension funding was mostly unchanged through September 2022. Based on market movements, the average funding ratio is estimated to have started and ended the month at 95.6%.

Equity markets had a weak month with Global Equities¹ and the S&P 500 dropping 9.5% and 9.2%, respectively. Plan discount rates² were estimated to have increased roughly 83 basis points over the month with the Treasury component increasing 61 basis points and the credit component widening 22 basis points. Plan assets with a traditional “60/40” asset allocation decreased 7.5%; however, the fall in liabilities due to rising rates resulted in no change in funding ratios by September month-end.

The Pension Solutions Monitor assumes a typical liability profile using an approximate duration of 12 years and 60% MSCI AC World Total Gross Index/40% Bloomberg Barclays US Aggregate Index (“60/40”) investment strategy, and incorporates data from LGIM America research, ICE indices and Bloomberg.

Pension funded status market summary: Equity markets underperformed with global equities down roughly 9.5%. Plan liabilities decreased due to higher discount rates. Funding ratio levels were mostly unchanged as the decrease in liabilities fell in line with the drop in assets.

Funded status risk Sept 2022 Equities ↓ Interest rates ↑ Credit spreads ↑ Sources: LGIM America, ICE indices and Bloomberg. Data as of September 30, 2022.

 

1. “Global equities” referred to here is represented by the MSCI AC World Total Gross Index.
2. Discount rates based on a blend of the Intercontinental Exchange Mature US Pension Plan AAA-A and Intercontinental Exchange Retired US Pension Plan AAA-A discount curves.

This material is intended to provide only general educational information and market commentary. Views and opinions expressed herein are as of the date set forth above 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.

These results are based on simulated or hypothetical performance results that have certain inherent limitations. Unlike the results in an actual performance record, these results do not represent actual trading. Because these trades have not actually been executed, these results may have under‐ or over-compensated for the impact, if any, of certain market factors, such as lack of liquidity. Simulated or hypothetical trading programs in general are also subject to the fact that they are designed with the benefit of hindsight. No representation is being made that any account will or is likely to achieve profits or losses similar to these being shown.

Unless otherwise stated, references herein to "LGIM", "we" and "us" are meant to capture the global conglomerate that includes Legal & General Investment Management Ltd. (a U.K. FCA authorized adviser), LGIM International Limited (a U.S. SEC registered investment adviser and U.K. FCA authorized adviser), Legal & General Investment Management America, Inc. (a U.S. SEC registered investment adviser) and Legal & General Investment Management Asia Limited (a Hong Kong SFC registered adviser). The LGIM Stewardship Team acts on behalf of all such locally authorized entities.

LGIM America's Pension Solutions Monitor, which estimates the health of a typical US corporate defined benefit pension plan, estimates that pension funding ratios moderately increased throughout August 2022. Based on market movements, the average funding ratio is estimated to have increased from 95.0% to 95.6% over the month.

Equity markets had a weak month with Global Equities¹ and the S&P 500 dropping 3.6% and 4.1%, respectively. Plan discount rates² were estimated to have increased roughly 43 basis points over the month with the Treasury component increasing 40 basis points and the credit component widening a touch by 3 basis points. Plan assets with a traditional “60/40” asset allocation decreased 3.3%; however, the fall in liabilities outweighed the drop in assets over the month, resulting in a 0.6% increase in funding ratios.

The Pension Solutions Monitor assumes a typical liability profile using an approximate duration of 12 years and 60% MSCI AC World Total Gross Index/40% Bloomberg Barclays US Aggregate Index (“60/40”) investment strategy, and incorporates data from LGIM America research, ICE indices and Bloomberg.

Pension funded status market summary: Equity markets performed negatively with global equities down roughly 3.6%. Plan liabilities decreased due to higher discount rates. Funding ratio levels increased slightly as the decrease in liabilities outpaced the drop in assets.

Funded status risk Aug 2022 Equities ↓ Interest rates ↑ Credit spreads ↑ Sources: LGIM America, ICE indices and Bloomberg. Data as of August 31, 2022.

 

1. “Global equities” referred to here is represented by the MSCI AC World Total Gross Index.
2. Discount rates based on a blend of the Intercontinental Exchange Mature US Pension Plan AAA-A and Intercontinental Exchange Retired US Pension Plan AAA-A discount curves.

For educational purposes only.

Views and opinions expressed herein are as of the date set forth above 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.

These results are based on simulated or hypothetical performance results that have certain inherent limitations. Unlike the results in an actual performance record, these results do not represent actual trading. Because these trades have not actually been executed, these results may have under‐ or over-compensated for the impact, if any, of certain market factors, such as lack of liquidity. Simulated or hypothetical trading programs in general are also subject to the fact that they are designed with the benefit of hindsight. No representation is being made that any account will or is likely to achieve profits or losses similar to these being shown.

Unless otherwise stated, references herein to "LGIM", "we" and "us" are meant to capture the global conglomerate that includes Legal & General Investment Management Ltd. (a U.K. FCA authorized adviser), LGIM International Limited (a U.S. SEC registered investment adviser and U.K. FCA authorized adviser), Legal & General Investment Management America, Inc. (a U.S. SEC registered investment adviser) and Legal & General Investment Management Asia Limited (a Hong Kong SFC registered adviser). The LGIM Stewardship Team acts on behalf of all such locally authorized entities.

LGIM America's Pension Solutions Monitor, which estimates the health of a typical US corporate defined benefit pension plan, estimates that pension funding ratios increased throughout July 2022. Based on market movements, the average funding ratio is estimated to have increased from 94.0% to 95.0% over the month.

Equity markets had a strong recovery over the month with Global Equities¹ and the S&P 500 gaining 7.0% and 9.2%, respectively. Plan discount rates² estimated to have decreased roughly 35 basis points over the month with the Treasury component decreasing 23 basis points and the credit component tightening 12 basis points. Plan assets with a traditional “60/40” asset allocation increased 5.2%. Positive equity performance overcame the increase in liabilities, resulting in a 1.0% increase in funding ratios over the month.

The Pension Solutions Monitor assumes a typical liability profile using an approximate duration of 12 years and 60% MSCI AC World Total Gross Index/40% Bloomberg Barclays US Aggregate Index (“60/40”) investment strategy, and incorporates data from LGIM America research, ICE indices and Bloomberg.

Pension funded status market summary: Equity markets performed positively with global equities up roughly 7.0%. Plan liabilities increased due to lower discount rates. Funding ratio levels increased as asset performance outpaced the increase in liabilities.

Funded status risk July 2022 Equities ↑ Interest rates ↓ Credit spreads ↓ Sources: LGIM America, ICE indices and Bloomberg. Data as of July 31, 2022.

 

1. “Global equities” referred to here is represented by the MSCI AC World Total Gross Index.
2. Discount rates based on a blend of the Intercontinental Exchange Mature US Pension Plan AAA-A and Intercontinental Exchange Retired US Pension Plan AAA-A discount curves.

For educational purposes only.

Views and opinions expressed herein are as of the date set forth above 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.

These results are based on simulated or hypothetical performance results that have certain inherent limitations. Unlike the results in an actual performance record, these results do not represent actual trading. Because these trades have not actually been executed, these results may have under‐ or over-compensated for the impact, if any, of certain market factors, such as lack of liquidity. Simulated or hypothetical trading programs in general are also subject to the fact that they are designed with the benefit of hindsight. No representation is being made that any account will or is likely to achieve profits or losses similar to these being shown.

Unless otherwise stated, references herein to "LGIM", "we" and "us" are meant to capture the global conglomerate that includes Legal & General Investment Management Ltd. (a U.K. FCA authorized adviser), LGIM International Limited (a U.S. SEC registered investment adviser and U.K. FCA authorized adviser), Legal & General Investment Management America, Inc. (a U.S. SEC registered investment adviser) and Legal & General Investment Management Asia Limited (a Hong Kong SFC registered adviser). The LGIM Stewardship Team acts on behalf of all such locally authorized entities.