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.

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