A Mercer news release said, allowing for changes in financial markets in 2009, the estimated year-end aggregate pension assets were $1.25 trillion, compared with the estimated value of the aggregate liabilities of $1.48 trillion. The estimated aggregate value of pension plan assets of the S&P 1500 companies at December 31, 2008, was $1.21 trillion, compared with estimated aggregate liabilities of $1.62 trillion.
According to the news release, most plan sponsors continue to have assets invested predominantly in return-seeking assets (mainly equities), which Mercer said were volatile and have a relatively low correlation to the changes in value of plan liabilities compared to liability-hedging assets such as bonds. As a result, Mercer asserted, the funded status of pension plans is likely to remain volatile.
According to Mercer, pension plans need to put in place a decision-making process that allows the plan to move efficiently and effectively to react to changing market conditions.