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Pension plan funding levels higher in September: Milliman

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Pension plan funding levels higher in September: Milliman

Funding levels of pension plans sponsored by large publicly held U.S. employers moved up in September as higher interest rates reduced the value of plan liabilities and investment gains boosted the value of plan assets, Milliman Inc. said in an analysis released Thursday.

Defined benefit plans offered by the 100 U.S. employers with the largest pension programs were an average of 74.5% funded as of Sept. 30, up from 72.4% funded as of Aug. 31, but sharply lower compared with the 78.7% funded ratio at the end of 2011.

In all, the plans' aggregate funding deficit declined by $45 billion last month. At the end of September, the value of aggregate plan assets was $1.325 trillion, while the value of plan liabilities was $1.778 trillion. That resulted in a $453 billion deficit compared with the $498 billion deficit at the end of August and a $533 billion deficit at the end of July.

“It may be too late in the year to call it a comeback — the funding deficit for these 100 pensions has grown by more than $100 billion in 2012. But two months in a row of funded status improvement is welcome news,” John Ehrhardt, a Milliman consulting actuary in New York and co-author of the analysis, said in a statement.