January market plunge stresses corporate pension plans
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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.
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