Large company pension plans are virtually fully funded, Abby Joseph Cohen, chief U.S. investment strategist for Goldman Sachs, said today at the CFA Institute's annual conference in Zurich.
Preliminary data from Goldman Sachs shows that pension plans of S&P 500 companies were underfunded by less than $50 billion at year-end 2005, which Ms. Cohen said is "close to zero." That's down from $98 billion in total underfunding the previous year. According to a report by Wilshire Associates, S&P 500 companies had $1.17 trillion in worldwide pension assets as of Dec. 31, up from $1.07 trillion the previous year.
Ms. Cohen said the bigger issue is that corporations are on the hook for nearly $400 billion in retiree health obligations. Those liabilities are highly concentrated in unionized companies.