The financial markets' poor showing in August left U.S.corporations' defined-benefit pension plans even deeper in the red.And there are additional challenges on the horizon for DB planfunding, including the prospect that the Federal Reserve will tryto bolster growth by pushing long-term rates lower. That couldlower the discount rates companies use to measure pensionobligations and increase the size of those obligations.

Mercer, the HR consulting company, estimates the aggregatepension deficit at S&P 1500 companies grew by $73 billion inAugust to total $378 billion. Pension plans took a double hit lastmonth, with the sell-off in stocks eroding their assets at the sametime the decline in interest rate caused their liabilities togrow.

The aggregate funded ratio of the S&P 1500 plans was 79% atthe end of August, according to Mercer, down from 83% at the end ofJuly and 81% at the end of 2010.

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Susan Kelly

Susan Kelly is a business journalist who has written for Treasury & Risk, FierceCFO, Global Finance, Financial Week, Bridge News and The Bond Buyer.