The aggregate deficit in pension plans sponsored by S&P 1500 companies decreased by $12 billion to $607 billion in November, according to Mercer. The funded ratio of these plans was 72 percent as of Nov. 30, 2012. The previous high for the year-end aggregate deficit was $484 billion on Dec. 31, 2011.
Equity markets gained about 0.6 percent in November and discount rates remained relatively flat. The net effect was a reduction in the funding deficit.
"We don't have any expectations of significant changes in interest rates over the next 30 days, and equity markets could be volatile due to uncertainty around the fiscal cliff." said Jonathan Barry, a partner in Mercer's Retirement Risk and Finance Group. "It is very likely that we will see these plans at the highest aggregate deficit since we have tracked this data. This will mean higher year-end balance sheet deficits and P&L expense for 2013."
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