Large company pension plan funding slips on falling interest rates

The average funded level of pension plans sponsored by large companies slipped in November as falling interest rates, which boosted the value of plan liabilities, more than offset equity market gains, according to a Mercer L.L.C. survey released Wednesday.

On average, pension plans sponsored by companies in the S&P 1500 were 83% funded as of Nov. 30, down from 84% funded as of Oct. 31.

“Despite the strong year for equities, we expect that many plan sponsors will report a lower funded status at the end of 2014 compared to the end of 2013 because of decreasing interest rates coupled with changes in mortality assumptions,” Jim Ritchie, a principal in Mercer’s retirement practice in Baltimore, said in a statement.

In all, the plans’ aggregate deficit was $384 billion at the end of November, up from $367 billion at the end of October and $352 billion at the end of September.