Despite strong equity markets, financial health of largest US corporate pension plans showed modest improvement in 2024

Despite strong U.S. equity market gains and rising long-term interest rates, the funded status of the nation’s largest corporate defined benefit (DB) pension plans improved only modestly in 2024, according to an analysis by WTW (NASDAQ: WTW), a leading global advisory, broking and solutions company.

WTW examined pension plan data for 361 Fortune 1000 companies that sponsor U.S. DB pension plans and have a December fiscal year-end date. The aggregate pension funded status of these plans at the end of 2024 is estimated to be 100%, just two percentage points higher than 98% at the end of 2023. Pension obligations declined from $1.25 trillion at the end of 2023 to an estimated $1.12 trillion at the end of 2024 due to higher interest rates and pension risk transfer activity.

Fortune 1000 aggregate pension plan funding levels
Year	2007	2008	2009	2010	2011	2012	2013	2014	2015	2016	2017	2018	2019	2020	2021	2022	2023	2024*
Aggregate level	107%	77%	81%	84%	78%	77%	89%	81%	81%	81%	85%	86%	87%	88%	95%	98%	98%	100%
*Estimated

“Strong gains in the stock market and rising interest rates would traditionally have helped to strengthen the overall financial health of corporate pension plans,” said Joseph Gamzon, managing director, Retirement, WTW. “However, pension plan assets are less concentrated on equity investments today, as they hold more bonds to support liability-hedging strategies to provide funded status stability. As a result, many plan sponsors were able to achieve their goals of funded status stability while also seeing moderate increases in pension plan funding during 2024.”

According to the analysis, pension plan assets declined by 8% in 2024, finishing the year at $1.12 trillion. Overall investment returns are estimated to have averaged 3% in 2024, although returns varied significantly by asset class. Domestic large capitalization equities increased by 25%, while domestic small/mid-capitalization equities rose by 12%. Long corporate and long government bonds, typically used in liability-driven investing strategies, realized losses of –2% and –6%, respectively. While overall investment returns were slightly positive, the decline in assets year over year resulted from another active year in pension risk transfers and cash contributions that were lower than in historical years.

“As we move into 2025, sponsors whose plans aren’t fully funded will want to keep an eye out for opportunities to manage costs and cash contributions, including investment strategy and de-risking initiatives. For those with well-funded plans, sponsors will want to think about how best to protect this asset and best utilize the surplus for employee benefits in the coming year,” said Fred Lamm, managing director, Retirement, WTW.

About the analysis

WTW analyzed 361 Fortune 1000 companies with December fiscal year-end dates for which complete data were available. The 2024 figures are estimates of U.S. plan assets and liabilities. The earlier figures are actual. Actual year-end 2024 results will be publicly available in a few months.

About WTW

At WTW (NASDAQ: WTW), we provide data-driven, insight-led solutions in the areas of people, risk and capital. Leveraging the global view and local expertise of our colleagues serving 140 countries and markets, we help organizations sharpen their strategy, enhance organizational resilience, motivate their workforce and maximize performance.

Working shoulder to shoulder with our clients, we uncover opportunities for sustainable success—and provide perspective that moves you. Learn more at wtwco.com.

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