Corporate defined-benefit assets for S&P 500 companies reached $1.12 trillion in 2004, up 8.7% from the year before, while liabilities increased 5.2% to $1.21 trillion, according to Wilshire Associates' annual report on corporate pension plan funding. The funding ratio for all S&P 500 plans rose to 92% last year from 89% in 2003. The median corporate funded ratio climbed to 85% from 82%.
Still, 81% of corporate pension plans were underfunded in 2004, unchanged from the prior year, according to Wilshire.
While gains in equity prices last year helped boost assets, falling interest rates forced companies to increase the value of their pension liabilities. The median 2004 investment return was 10.8% while the median discount rate used to value liabilities fell to 5.9% from 6.25% in 2003, according to Wilshire.
S&P 500 companies contributed a total of $48.3 billion last year, down from $65 billion in 2003. But excluding General Motors Corp., which contributed $18.6 billion in 2003 and $100 million in 2004, contributions increased last year to $48.2 billion from $46.4 billion in 2003.