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Member, Beacon International Group, Ltd.
Aided by a strong fourth quarter, funding levels of pension plans sponsored by large U.S. employers rebounded to end 2010 at the same level as the start of the year, according to an analysis released Friday.
On average, pension plans sponsored by 350 companies in the S&P 500 were 88% funded at the end of 2010, the same funding level as the start of the year, according to an Aon Hewitt Inc. analysis.
After falling earlier in 2010, funding levels rose sharply in the fourth quarter due to strong equity returns, according to the analysis. For example, plans’ funded ratio—the difference between assets and liabilities—was about 82% at the end of the third quarter.
Aon Hewitt’s findings compare with a December survey by Mercer Inc. that concluded that pension plans sponsored by 765 companies in the S&P 1500 were on average 81% funded at year-end 2010, down from an average funded ratio of 84% a year earlier.
“Despite troughs in the funded status not seen since the heart of the financial crisis and sub-5% discount rates, 2010 will be looked back upon as a year for plan sponsors to adjust their strategies and gear up for action in 2011 and beyond,” Joe McDonald, Aon Hewitt’s global risk services leader in Bridgewater, N.J., said in a statement.
Aided by a strong rebound in the equities markets, the funded status of pension plans sponsored by large employers has rebounded from a few months ago but remains lower than a year ago, according to an analysis released Wednesday.