The funding ratio of S&P 1500 companies’ pension plans remained at 80% in October, according to Mercer estimates.
An increase in AA bond yields helped offset a -1.9% return on equities during the month to keep the funding ratio the same.
The plans faced a combined $307 billion deficit as of Oct. 31, down 33% from Dec. 31. At that time the funded ratio was 75%.
Adrian Hartshorn, a member of Mercer’s financial strategy group, said he anticipates a 2010 pension expense for the S&P 15000 companies of around $40 billion, compared to $21.7 billion in 2008.
“The impact of credit spreads closing is pushing up the value of liabilities substantially,” he said in an interview.
