January market plunge stresses corporate pension plans

Hammered by the sharp fall in the equities market, the funded status of pension plans sponsored by large employers moved sharply lower in January, according to a Mercer L.L.C. analysis released Wednesday.

On average, pension plans sponsored by companies in the S&P 1500 were 79% funded as of Jan. 31, down from 83% as of Dec. 31.

“In just one month of 2016, we have seen the entire improvement in funded status for 2015 disappear,” Jim Ritchie, a principal in Mercer's Baltimore office, said in a statement.

“2015 may have been the end of the latest bull market, causing a great deal of stress on corporate pension plans,” Mr. Ritchie added.

In the aggregate, the Mercer analysis found that the plans' funding deficit increased by $68 billion in January, rising to $472 billion from the $404 billion deficit at the end of 2015.

In all, the plans at the end of January had $1.75 trillion in assets and $2.22 trillion in liabilities, according to Mercer.