Update: Milliman Analysis Indicates Pension Funded Status Declined $33 Billion in April
A $39 billion increase in pension liabilities only slightly tempered by $6 billion in investment gains
SEATTLE, May 14 /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 April, defined benefit pension plans experienced asset increases of $6 billion and liability increases of $39 billion, resulting in a $33 billion deterioration in funding status.
"April saw a return to the liability-driven dynamics that characterized much of 2009," said John Ehrhardt, co-author of the Milliman 100 Pension Funding Index. "We saw positive asset movement in April but a significant increase in the pension benefit obligation that dwarfed the month's investment gains. This explains how, despite an 18% cumulative asset return, we've still seen pension funding status decrease by $14 billion during the last 12 months."
Overall, the pension funding deficit increased to $239 billion at the end of April. Given current interest rates, investment gains of 21.5% for the remainder of 2010 would be needed to reach a 90% funded ratio, which would still leave the deficit at $136 billion.
To view the complete monthly update, go to www.milliman.com/expertise/employee-benefits/products-tools/pension-funding-study/index.php. To receive regular updates of Milliman's pension funding analysis, contact us at [email protected].
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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