From the June 2010 issue of Treasury & Risk magazine

Pension Plans See Red


The stock market's gains have not been enough to rescue U.S. companies' underwater defined-benefit pension plans. In April, the funding of 100 of the largest U.S. plans fell by $33 billion, according to actuarial firm Milliman, as a $6 billion increase in the value of their assets was more than offset by a $39 billion rise in their liabilities.

The plans' funding deficit now totals $239 billion and their funded ratio stands at 82.4%, Milliman says. It estimates that plans would have to post investment gains of 21.5% over the remainder of this year to reach 90% funded status.

There's hope that Congress will let companies delay part of the contribution many are due to make to their plans this year. In April, Phyllis Borzi, who heads the Labor Department's Employee Benefits Security Administration, signaled the
administration's approval of such legislation.

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