Pensions experienced a $120 billion decrease in funded status based on a $133 billion increase in the pension benefit obligation (PBO) and a $13 billion increase in asset value. This pushes the pension deficit to a record $533 billion, surpassing the previous record set on August 31, 2010. The funded ratio of 70.9% is the second lowest in the history of this study; on May 31, 2003, the funded ratio bottomed out at 70.5%.
In July, the discount rate used to calculate pension liabilities fell from 4.32% to 3.92%, pushing the PBO up to $1.831 trillion at the end of the month. The overall asset value for these 100 pensions increased from $1.284 trillion to $1.297 trillion.
Looking forward, if these 100 pensions were to achieve their expected 7.8% median asset return and if the current discount rate of 3.92% were to be maintained throughout 2012 and 2013, these pensions would improve the pension funded ratio from 70.9% to 72.3% by the end of 2012 and to 76.6% by the end of 2013.
Milliman Inc. based its results on 100 of the nation's largest DB plans.
The complete study is available here.