The funded status of pension plans sponsored by large employers dipped in July, as falling interest rates boosted the value of plan liabilities, according to a Mercer L.L.C. analysis released Wednesday.
On average, pension plans sponsored by companies in the S&P 1500 were 83% funded as of July 31 down from 84% as of June 30, but still significantly higher compared to the end of January when the plans were 74% funded, on average.
“The solid market returns seen in July were more than offset by a decrease in discount rates over the month, which highlights just how sensitive these plans are to rate movements,” said Jonathan Barry, a partner with Mercer's retirement business in Boston.
In the aggregate, the Mercer analysis found that the plans' funding deficit rose by $33 billion in July to $379 billion.
In all, the plans, at the end of July had $1.84 trillion in assets and $2.22 trillion in liabilities.
U.K.-based pension insurer Rothesay Life Ltd. has agreed to insure £1.6 billion ($2.48 billion) of bulk annuities for United Kingdom’s Civil Aviation Authority pension plan, reported Reuters.