SEATTLE, March 29, 2011 /PRNewswire/ — Milliman, Inc., a premierglobal consulting and actuarial firm, today released the results ofits annual Pension Funding Study, which consists of 100 of thenation's largest defined benefit pension plans. In 2011, theseplans experienced asset returns of 12.8% (a $115 billionimprovement) that were offset by a liability increase of 7.7% (a$103 billion increase) based on a decrease in the discount rate.The decline in discount rates fueled record levels of pensionexpense for these plan sponsors. Collectively, these pensions wentinto the year expecting a $30 billion charge to earnings, with thefinal number almost doubling that estimate, at $59.4 billion.

“This was a record year for pension contributions, though thenumber could have exceeded $60 billion if a few things had gonedifferently,” said John Ehrhardt, co-author of the Milliman PensionFunding Study. “Pension funding relief enacted last summer helpedreduce the funding burden, along with positive investmentperformance. If interest rates remain at current levels (ordecline), contributions will be even higher in 2011.”

While the funded status for the year changed only modestly, theyear was marked by several significant events. In August, fallinginterest rates drove up the projected benefit obligation andresulted in a record deficit for the 11-year history of this study.Over the course of the year, several companies adopted newaccounting approaches, which involved full or substantiverecognition of accumulated losses and a larger charge to 2010balance sheets. Had similar accounting changes been institutedacross all of the companies in this study, the resultant chargewould have totaled $342 billion.

Despite the eventful (and sometimes volatile) year, pensioninvestment strategies remained relatively consistent.

“For the year, the asset allocation of these 100 pension plansdid not change significantly, as investment in equities onlydecreased from 45% to 44%,” said Paul Morgan, co-author of theMilliman Pension Funding Study. “Fixed income allocations wereunchanged at 36%, but allocations to other (alternative)investments increased from 19% to 20%. On average, there were notmany changes, though we did see eight of the 100 companies decreasetheir equity allocations by more than 10%.”

To view the complete study, go to http://www.milliman.com/expertise/employee-benefits/products-tools/pension-funding-study/index.php.To receive regular updates of Milliman's pension funding analysis,contact us at [email protected].

About Milliman
Milliman is among theworld's largest independent actuarial and consulting firms. Foundedin Seattle in 1947 as Milliman & Robertson, the companycurrently has 54 offices in key locations worldwide. Millimanemploys over 2,500 people. The firm has consulting practices inhealthcare, employee benefits, property & casualty insurance,life insurance and financial services. Milliman serves the fullspectrum of business, financial, government, union, education andnonprofit organizations. For further information, visit www.milliman.com

About the Milliman 100 Pension FundingIndex
For the past ten years, Milliman has conductedan annual study of the 100 largest defined benefit pension planssponsored by U.S. public companies. The Milliman 100 PensionFunding Index projects the funded status for pension plans includedin our study, reflecting the monthly impact of market returns andinterest-rate changes on pension funded status, utilizing theactual reported asset values, liabilities, and asset allocations ofthe companies' pension plans.

This study includes the 100 U.S. public companies with thelargest defined benefit pension assets whose 2010 annual reportswere released by March 3, 2011. Eleven of the companies included inthe 2011 study had fiscal years other than the calendar year.Private companies, mutual insurance companies, and U.S.subsidiaries of foreign parents were excluded from the study.

Projections for 2011 are based on the Milliman 100 PensionFunding Index, which has been updated to reflect the data from thisstudy. This index is published on a monthly basis and reflects theeffect of market returns and interest-rate changes onpension-funded status, utilizing actual reported asset values,liabilities, and asset allocation from the Milliman Pension FundingStudy.