Pension plan funding levels plunged in June: Milliman

Funding levels of pension plans sponsored by large publicly-held U.S. employers plunged in June as lower interest rates fueled a rise in plan liabilities, Milliman Inc. said in an analysis released Monday.

Defined benefit plans offered by the 100 U.S. employers with the largest pension programs were an average of 75.6% funded as of June 30, down from 77.9% at the end of May 31.

In all, the funding deficit jumped $77 billion last month. At the end of June, the value of aggregate plan assets was $1.283 trillion, while the value of plan liabilities was $1.698 trillion. That resulted in a $415 billion deficit, up from $358 billion at end of May.

“With the help of the lowest discount rate in the 12-year history of our study, corporate pensions last month saw their funding deficit increase, to a near-record $415 billion,” John Ehrhardt, a Milliman consulting actuary in New York and co-author of the analysis, said in a statement.