Administration April 2, 2013

S&P 1500 Pension Funding Levels Improve

April 2, 2013 (PLANSPONSOR.com) - The aggregate deficit in pension plans sponsored by S&P 1500 companies improved significantly in the first quarter of 2013, according to Mercer.
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The deficit decreased by $185 billion from the record year-end 2012 deficit to $372 billion as of the end of March 2013. The deficit improved by $107 billion in March alone. The funded ratio (assets divided by liabilities) improved to 82% at the end of March compared to 77% at the end of February and 74% at December 31, 2012.  

The significant improvement of the past month was driven by positive equity growth during the month, which gained 3.75%, Mercer said, driving the S&P to record highs by the end of March. The high quality corporate bond rates which affect the liabilities increased slightly.  

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In addition to investment performance, assets have also grown due to contributions. During the fiscal year ending in 2012, S&P 1500 plan sponsors contributed more than $80 billion to their plans, which is $20 billion more than they had expected to at this time last year despite the enactment of MAP-21, which provided sponsors with the opportunity to lower contributions from prior requirements.

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