Administration June 5, 2003

Ryan: Pension Liability Improves in April

May 6, 2003 (PLANSPONSOR.com) - Pension plans' asset-to-liability ratio improved to a positive 1% in April on the heels of optimistic returns for both domestic and international equity markets.
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Such a positive difference has not been seen in over three years. Year-to-date, liabilities continued a steady growth pattern at 2.71% for the year, according to data from Ryan Labs.

Since December 1999 though, the asset-to-liability growth rate difference (pension deficit) is now 66.83%, suggesting funding ratios below 60% for most pensions.   Ryan said that moving the funding ratio 67% to the left would cause many pension plans to fall into a deep deficit position. Higher contributions, earnings drag, Pension Benefit Guaranty Corporation (PBGC) premium penalties and even solvency issues will confront America’s pensions over the next few years, Ryan said.

Ryan’s data is based on roughly $200 billion in assets tracked in its Custom Liability Index system. The first liability index was put together by Ryan in 1991.

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