The funded status of defined-benefit pensions has deteriorated again so far this year, leaving companies with quite a hole to climb out and suggesting more plan sponsors will freeze or close their plans. "2012 so far has been a difficult year for pension plan sponsors," says Jonathan Barry, who leads Mercer's defined-benefit risk consulting efforts for its U.S. retirement risk and finance business. "Even though we've had decent equity returns for the year, interest rates have dropped so much that the majority of U.S. pension funds' funded status has declined."

Mercer calculated the aggre-gate deficit of plans operated by S&P 1500 companies totaled $689 billion at the end of July, up $200 billion from the shortfall at the end of last year. It estimates the plans' aggregate funded ratio has fallen to 70%, down from 75% at the end of 2011 and 81% at year-end 2010.

"If you ended the year right there, that's going to mean very large balance-sheet adjustments, very large P&L hits for 2013, very large cash contribution requirements," Barry says, summing up the pension situation as putting "a lot of pressure on companies."