Milliman Analysis Indicates Worst One-Month Pension Funded Performance Since the 2008 Meltdown

A poor month of May includes $41 billion decrease in market value and $14 billion increase in liabilities

Jun 10, 2010, 12:42 ET from Milliman, Inc.

SEATTLE, June 10 /PRNewswire/ -- Milliman, Inc., a premier global consulting and actuarial firm, today released the latest update to the Milliman 100 Pension Funding Index, which consists of 100 of the nation's largest defined benefit pension plans. In May, defined benefit pension plans experienced asset decreases of $41 billion and liability increases of $14 billion, resulting in a $55 billion deterioration in funding status.

"We haven't seen a month like this in a while," said John Ehrhardt, co-author of the Milliman 100 Pension Funding Index. "We saw a similar decline in overall funded status in June of 2009, but that was largely liability-driven. Last month's precipitous decline was the result of steep asset losses and further liability increases, making it the worst month for pension funded status since the dire days of late 2008."

Overall, the pension funding deficit increased to $294 billion at the end of May. Given current interest rates (5.61%), investment gains of 34.4% for the remainder of 2010 would be needed to reach a 90% funded ratio, which would still leave the deficit at $138 billion.

To view the complete monthly update, go to http://www.milliman.com/expertise/employee-benefits/products-tools/pension-funding-index/. To receive regular updates of Milliman's pension funding analysis, contact us at pensionfunding@milliman.com.

About Milliman

Milliman is among the world's largest independent actuarial and consulting firms.  Founded in Seattle in 1947 as Milliman & Robertson, the company currently has 52 offices in key locations worldwide.  Milliman employs over 2,400 people.  The firm has consulting practices in healthcare, employee benefits, property & casualty insurance, life insurance and financial services.  Milliman serves the full spectrum of business, financial, government, union, education and nonprofit organizations.  For further information, visit www.milliman.com.

About the Milliman 100 Pension Funding Index

For the past ten years, Milliman has conducted an annual study of the 100 largest defined benefit pension plans sponsored by U.S. public companies. The Milliman 100 Pension Funding Index projects the funded status for pension plans included in our study, reflecting the monthly impact of market returns and interest-rate changes on pension funded status, utilizing the actual reported asset values, liabilities, and asset allocations of the companies' pension plans.

The results of the Milliman 100 Pension Funding Index were based on the actual pension plan accounting information disclosed in the footnotes to the companies' annual reports for the preceding fiscal year and for previous fiscal years. In addition to providing the financial information on the funded status of U.S. qualified pension plans, the footnotes may also include figures for the companies' nonqualified and foreign plans, both of which are often unfunded or subject to funding standards different from those for U.S. qualified pension plans. The results do not represent the funded status of the companies' U.S. qualified pension plans under ERISA.

SOURCE Milliman, Inc.



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