Corporate pension plans set a new record they won't likely be celebrating: Their overall funding deficit increased by nearly $146 billion in July alone, reaching $689 billion in the red.
According to research by Mercer, the aggregate deficit in pension plans sponsored by S&P 1500 companies is indeed a new record-breaker. This deficit corresponds to a record low aggregate funded ratio of 70 percent as of July 31, 2012, compared to a funded ratio of 74 percent as of June 30, 2012, at which point the aggregate deficit was $543 billion.
Although US equity markets rose 1.4 percent during July, discount rates fell another 30 to 55 basis points resulting in liability increases ranging from 3 percent to 11 percent during the month. The continued fall in US Treasury yields and the narrowing of corporate bond credit spreads led to discount rates hitting a new all-time low for the third consecutive month.
Complete your profile to continue reading and get FREE access to BenefitsPRO, part of your ALM digital membership.
Your access to unlimited BenefitsPRO content isn’t changing.
Once you are an ALM digital member, you’ll receive:
- Breaking benefits news and analysis, on-site and via our newsletters and custom alerts
- Educational webcasts, white papers, and ebooks from industry thought leaders
- Critical converage of the property casualty insurance and financial advisory markets on our other ALM sites, PropertyCasualty360 and ThinkAdvisor
Already have an account? Sign In Now
© 2024 ALM Global, LLC, All Rights Reserved. Request academic re-use from www.copyright.com. All other uses, submit a request to [email protected]. For more information visit Asset & Logo Licensing.
