Funded Status of Pensions Remains Stable in February

A Mercer news release said the funded status of pension plans sponsored by the S&P1500 companies was 83% at the end of February, unchanged from the position at the end of January. This is equivalent to a deficit of $256 billion at the end of February compared with a deficit at the end of January of $263 billion, according to the announcement.

The 2009 year-end deficit was $247 billion, corresponding to a funded status of 84%.   

Mercer data shows the estimated aggregate value of pension plan assets of the S&P 1500 companies at December 31, 2009, was $1.25 trillion, compared with estimated aggregate liabilities of $1.50 trillion. Allowing for changes in financial markets though the end of February 2010, changes to the S&P 1500 constituents, and newly released financial disclosures, the estimated aggregate assets were $1.25 trillion, compared with the estimated value of the aggregate liabilities of $1.51 trillion.

Mercer attributes the funded status stability to relatively benign market conditions in February. The company said plan sponsors continue to work towards adopting investment strategies that are more closely linked to their liabilities.

Mercer pointed out that for financial year ends on or after December 31, 2009, new disclosure rules from the Financial Accounting Standards Board (FASB) will require plan sponsors to provide more detail and descriptive information about their pension plan asset allocations and investment strategies.