Login Register Subscribe

Falling interest rates hurt funding levels in large pension plans: Survey



Retirement Benefits More + Less -

Impacted by falling interest rates, which boosted the value of liabilities, the funding levels of pension plans sponsored by large publicly held U.S. employers slipped in April, according to a survey released Thursday by Milliman Inc.

Defined benefit plans offered by the 100 U.S. employers with the largest pension programs were an average of 84.7% funded as of April 30, down from 85.3% in March and 85.6% in February.

“We keep slipping further and further away from full funding,” John Ehrhardt, a Milliman principal and consulting actuary in New York, said in a statement.

“The historic improvement of 2013 has been countered by a $72 billion decrease in funded status so far in 2014, with falling interest rates driving much of the change,” he added.

At the end of April, the plans had $1.427 trillion in assets and $1.685 trillion in liabilities, resulting in a funding deficit of $258 billion.