A third of the largest U.S. corporate pension plans are severely underfunded, according to a report from JPMorgan Asset Management. According to the study, 56 of the 185 largest corporate plans have a funding ratio of 80% or less, while another 56 corporate plans have a funding ratio of between 80% and 90%. The remaining 73 corporations have pension plans with a funding ratio greater than 90%.
However, pension troubles are manageable for many companies, said Gabriella Barschdorff, vice president and strategic investment adviser, during a conference call today. Ms. Barschdorff pointed out that while about 30% of corporations are severely underfunded, less than half of the group have pension deficits that large when compared with their market capitalizations. Only 25 of the 185 largest corporations have pension deficits greater than 15% of their overall market caps.
The average funding ratio among the largest corporate plans is 88%, compared with 87% last year.