Mercer data showed the funded status of pension plans sponsored by the largest US companies remained at 75% in January. However, the value of both pension assets and liabilities declined during the month, which reduced the dollar amount of the estimated aggregate deficit to $380 billion from $409 billion at the end of December, according to a press release.
By comparison, at December 31, 2007, the pension plans sponsored by companies in the S&P 1500 had an aggregate surplus of $60 billion and a funded status of 104%.
Adrian Hartshorn, a member of Mercer’s Financial Strategy Group, said in the press release that Mercer is now seeing sponsors take action considering the general market volatility.
“Plan sponsors are reevaluating the financial risks and their risk tolerance. Some are simply rebalancing assets, optimizing investment performance within current asset guidelines or altering the contribution policy to make good the deficit that has appeared in the last 12 months. However, some plan sponsors are making more significant changes to the strategic asset allocation, adopting a risk-reducing investment strategy, or changing plan design,” he stated.