Oct. DB Funded Status Stays Flat

November 5, 2009 (PLANSPONSOR.com) - The funded status of pension plans sponsored by S&P 1500 companies remained flat at 80% (deficit of $307 billion) in October, according to Mercer Investment Consulting.

This compares to year-end 2008 year-end when the plans had a $409-billion deficit and a 75% funded status.

At work during the month, Mercer said, was a downturn in equity performance (equities returned a negative 1.9%) and an uptick in AA bond yields.

Allowing for changes in financial markets in 2009 year-to-date, the estimated aggregate assets were $1.21 trillion, compared with the estimated value of the aggregate liabilities of $1.52 trillion. The estimated aggregate value of pension plan assets of the S&P 1500 companies at December 31, 2008, was $1.21 trillion, compared with estimated aggregate liabilities of $1.62 trillion.

“Based on the latest figures, we are anticipating a 2010 pension expense for the S&P 1500 companies of around $40 billion, compared to the 2008 reported pension expense of $21.7 billion,” said Adrian Hartshorn, a member of Mercer’s Financial Strategy Group, which helps companies manage financial risk in their retirement programs, in a news release.