US pension plans post slight gain during June
12 July 2011 New York
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The aggregate deficit in pension plans sponsored by S&P 1500 companies decreased by $15 billion during June, from a deficit of approximately $246 billion as of May 31, 2011, to $231 billion as of June 30, according to new figures from Mercer.
This deficit corresponds to an aggregate funded ratio of just over 86 per cent as of June 30, compared to a funded ratio of just under 86 per cent at May 31, 2011. Overall, funded status has improved during 2011, nearly five per cent higher than the 81 per cent funded position recorded at December 31, 2010.
“Despite the seemingly small change in overall funded status for the month, we saw tremendous volatility in June.” said Jonathan Barry, a partner with Mercer’s Retirement, Risk and Finance group.
“The first half of the month saw aggregate funded status drop about 3 per cent, driven primarily by declines in the equity markets. However, these declines were more than offset by a strong run-up in equities in the last two weeks of the year, combined with a rise in discount rates used to value pension liabilities.”
This deficit corresponds to an aggregate funded ratio of just over 86 per cent as of June 30, compared to a funded ratio of just under 86 per cent at May 31, 2011. Overall, funded status has improved during 2011, nearly five per cent higher than the 81 per cent funded position recorded at December 31, 2010.
“Despite the seemingly small change in overall funded status for the month, we saw tremendous volatility in June.” said Jonathan Barry, a partner with Mercer’s Retirement, Risk and Finance group.
“The first half of the month saw aggregate funded status drop about 3 per cent, driven primarily by declines in the equity markets. However, these declines were more than offset by a strong run-up in equities in the last two weeks of the year, combined with a rise in discount rates used to value pension liabilities.”
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