Despite healthy employer contributions and strong investment returns, U.S. corporations booked a deficit in their pension funding levels last year due primarily to sustained low interest rates that lifted liabilities to record highs, reports Towers Watson.
The firm analyzed pension disclosures for the 100 largest pension plan sponsors among publicly traded companies. It found that at year-end 2012, the pension deficit reached a collective $295.2 billion, a 17 percent jump from the end of 2011 when the tally was $252.7 billion. That drop further represents a significant turnaround from 2007 when the same firms had a pension surplus of $86 billion. Overall, the aggregate funding ratio dropped by 2 percentage points, from 79 percent funded at the end of 2011 to 77 percent at year-end 2012.