A Wilshire survey of S&P 500 corporate pension plans showed liabilities increased by $105 billion in 2002 to just more than $1 trillion, the "worst year ever for corporate plans 89% are underfunded. S&P 500 companies defined benefit assets fell by $106 billion to $892 billion, lowering their funding ratio to 83% from 104% in 2001; the plans had a cumulative deficit of $177 billion as of Dec. 31, from a $34 billion surplus a year earlier, according to Wilshire.
Falling interest rates throughout the year contributed to the dramatic increase in liabilities. The median discount rate used to value liabilities dropped from 7.25% to 6.75%, according to Wilshire. S&P 500 companies contributions to their defined benefit plans increased nearly fourfold to $41 billion, from $12 billion in 2001, with further increases expected, Wilshire said.