Institutional Investors

Corporate pensions see funding status worsen in 2011

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The funded status for US corporate pensions at the end of this year will be worse than it was at the end of 2010, which in turn will lead to higher expense levels and contribution requirements, according to consulting firm Mercer.

The aggregate deficit in pension plans sponsored by S&P 1500 companies was at $391 billion as of the end of November. This equals an aggregate funded ratio of 78%, below the 81% level tallied at the end of 2010.

Due to equities underperforming and falling interest rates, plan sponsors will need to position themselves to either bear