With pension funding deficits among large employers predicted to reach a new record high at year-end, New York-based Mercer L.L.C. this week published its top pension risk management priorities for plan sponsors in 2013.

Mercer analysts Wednesday said the year-end aggregate pension funding deficit among S&P 1500 firms was likely to be the highest on record since Mercer began tracking listed companies' funding levels in 2007, having already grown by $124 billion over the $484 billion aggregate gap recorded at the end of 2011.

In a supplemental report released Thursday, Mercer offered five risk management strategies employers can use to minimize the damage ballooning deficits could potentially inflict on their firms' overall financial performance.

“As we approach year-end 2012, we are in a market environment in which interest rates remain stubbornly low with little sign of significant increase in the near future, and where volatile equity market conditions can whipsaw plan asset levels,” said Richard McEvoy, the New York-based leader of Mercer's financial strategy group. “Plan sponsors, who are concerned with the effect pension volatility has on their key financial metrics, need to put in place a robust risk management plan that will allow them to quickly react to market changes and take advantage of opportunities to de-risk their plans.”

Mercer's top five pension risk management priorities include:

• Establish outcome-oriented goals through frequent review of plans' funded status.

• Assess the full range of potential effects market conditions and fluctuations in plan funded status would have on cash flow, balance sheet and reported earnings.

• Develop a formal de-risking plan that can respond quickly as opportunities to shed risk arise.

• Consider liability transfer options, including annuity purchases and cashout options.

• Review corporate governance structures and decision-making processes to identify roadblocks to quick capitalization on de-risking opportunities.