Milliman Analysis: Volatile Year for Corporate Pensions Continues in September, This Time With a Positive Swing

Funded status increased by $67 billion during September

Oct 08, 2010, 14:49 ET from Milliman, Inc.

SEATTLE, Oct. 8 /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 September, these plans experienced asset increases of $38 billion and liability decreases of $29 billion, resulting in a $67 billion increase in pension funded status for the month. The improvement comes on the heels of August lows that constituted the worst reported pension funded status in the 10 years of this study.

"In September, the volatility went our way, which was good to see after last month's all-time low," said John Ehrhardt, co-author of the Milliman 100 Pension Funding Index. "This month was a positive step toward full funding, but we have a long climb ahead of us. Just to put this in perspective, it would take 17 consecutive, similarly positive months to get back to 100% funding. We all know that won't happen in these volatile times, but a positive step is a positive step."

Overall, the pension funding deficit decreased to $393 billion at the end of September. If, for the remainder of the year, the companies in this study were to achieve their expected 8.1% median asset return and if the current discount rate of 4.93% were maintained for the balance of 2010, we forecast the funded status of the surveyed plans would increase to $390 billion at years' end.

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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