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Industrial companies beneath the waves

The aggregate pension benefit obligation of the industrials sector was 36% of its total market capitalization. This led the major sectors of the S&P 500, followed by utilities (27%) and materials (21%). In contrast, the consumer staples, financials and health-care sectors were the lowest in the category.

Among the S&P 500 sectors, industrials have by far the largest aggregate total plan deficit at $152 billion; by comparison, consumer discretionary companies have the second largest at $44 billion. The funding ratio of industrial company plans is 75%, in line with energy and materials companies, and slightly higher than the telecom sector. Pension plans run by financial firms are in the best shape among their peers, at a 94% funding ratio and a total deficit of $13 billion.