Ryan: Liabilities Gain Distance Over Assets

April 8, 2004 (PLANSPONSOR.com) - For the third month in a row, the growth of pension liabilities outpaced a gain in assets.

March was particularly bad for the asset/liability deficit as assets in the S&P 500 were down 1.51% at the same time the Ryan Labs liability index was up 1.62%.  With March’s overall lackluster performance, the asset/liability deficit has favored liabilities for the first three months of 2004 (See  Liabilities Outpace Assets in February ) and for the year, assets have underperformed liabilities by 4.28%, according to data supplied by Ryan Labs, the s pecialist fixed income research and asset management firm that manages bond portfolios tailored to match plans’ liability profiles.

Since December 1999, the cumulative Asset/Liability deficit is now at -47.60% suggesting funding ratios below 70% for most pensions.

Examining March’s fixed-income market shows the positive nominal return performance continued in March as all sectors finished the first quarter in positive territory.  The yield curve declined moderately and the curve steepened as short and intermediate securities outperformed the long end.