October Sees $4B Drop in Pension Funding Status

November 10, 2009 (PLANSPONSOR.com) – Pensions experienced asset decreases of $7 billion and liability decreases of roughly $3 billion in October, resulting in a $4-billion decrease in funded status, according to data from the latest Milliman 100 Pension Funding Index.

A news release said the funded pension ratio decreased from 75.3% to 75%.

Over the last 12 months, the cumulative asset return has been 9.12% and the funded status has fallen by $68 billion. For these 12 months, the funded ratio of the Milliman 100 companies has fallen from 93.8% to 75%, the announcement said.

“We’ve seen six months and counting of pension funding declines,” said John Ehrhardt, co-author of the Milliman 100 Pension Funding Index, in the news release. “This month, though, we saw a reversal of the recent pattern, with the decline driven by a reduction in assets rather than by an increase in liabilities, as has been the case for several months prior.”

More information is at http://www.milliman.com/expertise/employee-benefits/products-tools/pension-funding-study/index.php.