Pension plans funding levels highest in 5 years: Mercer
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Bolstered by solid investment returns, the funded status of pension plans sponsored by large employers crossed the 90% threshold in September, rising to their highest level in five years, according to a Mercer L.L.C. analysis released Wednesday.
On average, pension plans sponsored by companies in the S&P 1500 were 91% funded as of Sept. 30, up from 89% at the end of August and sharply higher from 74% at the end of 2012.
Pension plan funding levels haven't been this high since Sept. 30, 2008, when the plans on average were 99.7% funded. A month later, though, average funding levels had fallen to 89.4%, as the equities market sharply fell and the economy headed into the Great Recession.
“It's been a long road — nearly five years — for plan sponsors to get back over a 90% funded status,” Jonathan Barry, a partner in Mercer's retirement consulting group in Boston, said in a statement.
In the aggregate, the plans' funding deficit at the end of September was $182 billion, down from $213 billion as of Aug. 31, and sharply lower than the record deficit of $557 billion as of Dec. 31, 2012.
The aggregate funding deficit at the end of September was the lowest since April 30, 2009, when the deficit was $167 billion.
