By Pension and Benefits Editorial Staff
The funded status of the nation's largest corporate pension plans dropped at the end of 2018 as a sharp decline in the stock market during the fourth quarter offset what looked to be a second consecutive year of improved funding, according to an analysis by Willis Towers Watson.
The survey examined pension plan data for 389 Fortune 1000 companies that sponsor U.S. defined benefit pension plans and have a December fiscal-year-end date. Results indicate that the aggregate pension funded status is estimated to be 84 percent at the end of 2018, compared with 85 percent at the end of 2017. After the first nine months of 2018, the aggregate pension funded status stood at 90 percent. The analysis also found the pension deficit is projected to be $255 billion at the end of 2018, slightly lower than the $260 billion deficit at the end of 2017.
“Pension plans had been on track for another year of improved funding through the third quarter of 2018 as a result of higher interest rates, relatively stable equity markets and solid contributions,” said Jennifer DeMeo, senior director at Willis Towers Watson. “However, the steep decline in the equities market during the fourth quarter, particularly in December, negated what had been a very positive year.”
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