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Discount rate plays havoc with corporate pensions

Contributions also were down $4.4 billion last year, probably thanks to the federal highway bill, which allowed pension sponsors to delay making their mandatory payments.

By Marlene Y. Satter | Updated on April 03, 2015

Milliman Inc.’s latest look at the state of corporate pensions offers a more-than-familiar note: Record low discount rates in 2014 dragged down the funding status of pensions even though investments saw double-digit gains. 

The consulting and actuarial firm, in a just-out report, said that in spite of gaining 10.9 percent from investments, the nation’s 100 largest plans experienced a higher increase in liabilities than in assets, resulting in a drop in funded status of 6.1 percent to 81.7 percent. 

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