Pension funding down in August on market slide

The funded status of very large pension plans sponsored by public companies slipped in August as declines in the equity markets more than offset rising interest rates, according to a Milliman Inc. survey released Wednesday.

Defined benefit plans offered by U.S. employers with the 100 largest pension programs were an average of 83.4% funded as of Aug. 31, down from 84.9% funded as of July 31.

“For the year, these pensions had performed well on the asset side, but August erased all those gains,” John Ehrhardt, a Milliman principal and consulting actuary in New York, said in a statement.

At the end of August, the plans had $1.417 trillion in assets and $1.699 trillion in liabilities, resulting in a funding deficit of about $282 billion. That is an increase of about $22 billion compared with the end of July, when the funding shortfall was about $260 billion.