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Funding Levels for Biggest Employer Pension Plans Plunge in July: Milliman

In all, the funding deficit jumped by a record $120 billion last month.

August 7, 2012
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Funding levels of pension plans sponsored by large publicly held U.S. employers plunged in July as lower interest rates fueled a rise in plan liabilities, Milliman Inc. said in an analysis released Aug. 6.

Defined benefit plans offered by the 100 U.S. employers with the largest pension programs were an average of 70.9 percent funded as of July 31, down from 75.6 percent as of June 30 and 77.9 percent at the end of May 31. July's 70.9 percent funded ratio is the second lowest in the 12-year history of the Milliman analysis, eclipsed only by the 70.5 percent funded ratio of May 2003.

In all, the funding deficit jumped by a record $120 billion last month. At the end of July, the value of aggregate plan assets was $1.297 trillion, while the value of plan liabilities was $1.831 trillion. That resulted in a record $533 billion deficit, up from $414 billion at the end of June.

The prior record monthly deficit was $421 billion, which was set in August 2010.

Jerry Geisel writes for Business Insurance, a sister publication of Workforce Management. To comment, email editors@workforce.com.

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