The funded status of very large pension plans sponsored by publicly held companies slipped in August as falling interest rates, which increased the value of plan liabilities, more than offset investment gains according to a Milliman Inc. survey released Monday.
Defined benefit plans offered by the 100 U.S. employers with the largest pension programs were an average of 84% funded as of Aug. 31, down from 84.8% funded as of July 31.
At the end of August, the plans had $1.473 trillion in assets and $1.754 trillion in liabilities, resulting in a funding deficit of $281 billion, up from $259 billion at the end of July.
“It was a strong month of asset improvement, but there's no counteracting record-low interest rates,” John Ehrhardt, a Milliman consulting actuary in New York said in a statement. “Year to date, rates have swollen pension liabilities by $165 billion,” he added.
When federal lawmakers passed the Employee Retirement Income Security Act in 1974, they put aside a key issue affecting a big slice of the pension universe: multiemployer plans.