Pension Plan Funding Declines in October

Aggregate deficit of S&P 1500 plans rises $26 bln, Mercer says.

U.S. corporate pension plans saw their funded status slip in October, with the aggregate shortfall of plans operated by S&P 1500 companies growing by $26 billion, to $619 billion, HR consultancy Mercer estimates. The erosion in defined-benefit retirement plans’ funded status reflects both a 2% decline in equity markets last month and a decrease of 6 basis points in discount rates, which are used to calculate plan liabilities.

Mercer notes that the October decline reversed a modest gain in plans’ funding in September. The aggregate funded ratio at the end of October was 72%, down from 73% at the end of September, but up from the record low of 70% at the end of July.






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