Twenty percent of U.S. corporate pension plans are fully funded, compared with only 5% of U.K. corporate plans, according to Aon Consulting research. Overall, U.S. corporate pension plans were 91% funded as of Dec. 31, 2004, based on FAS 87 accounting standards, while U.K. corporate plans were 85% funded as of the same date based on FRS 17 accounting assumptions, Aon Consulting found. U.S. companies made cash contributions of more than 10% of plan assets during the past two years, compared with 7% for U.K. firms, the research said. Aon cited that disparity as one of the main reasons U.S. plans are better funded. Also, the average U.S. corporate plan deficit represents roughly two months of pretax profits, compared with seven months of pretax profits for the average U.K. company.
Aon studied the annual reports of 80 Fortune 100 companies that sponsor defined benefit plans with combined assets of about $800 billion, and 200 U.K.-based companies with DB plans totaling £350 billion ($632.9 billion) in assets.