Ryan: Liability Gap Spikes in September

October 7, 2003 (PLANSPONSOR.com) - A rally in interest rates led to one of the highest monthly growth rates for both the bond market and pension liabilities, as the pension asset/liability gap widened even more in September.

The liability increase of 0.7% moved the year-to-date returns to 3.28%.  This helped spur a massive movement in the 2003 asset/liability ratio, which now stands at 7.68% year-to-date from 13.57% last month (See  Ryan: Liabilities Widen August’s Funding Gap ), according to data from Ryan Labs.

Since December 1999, the asset-to-liability growth rate difference (pension deficit) is now -60.15%, suggesting funding ratios below 60% for most pensions.   Ryan’s data is based on roughly $200 billion in assets tracked in its Custom Liability Index system.