Monday, October 10, 2011

Caught between the rock (of plunging equities) and the hard place (of plunging discount rates)

The aggregate deficit in pension plans sponsored by S&P 1500 companies increased by $134 billion during September, from a deficit of approximately $378 billion as of August 31, 2011, to $512 billion as of September 30, according to new figures from Mercer. This deficit corresponds to an aggregate funded ratio of 72% as of September 30, compared to a funded ratio of 79% at August 31, 2011. [...] "The end of September marks the largest deficit since we have been tracking this information," said Jonathan Barry, a partner in Mercer's Retirement Risk and Finance business.

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