The combined funded status of the 100 largest U.S. corporate defined benefit plans studied by Milliman decreased $33 billion in April, with liability increases of $39 billion outpacing asset increases of $6 million.
The overall pension funding deficit of the 100 plans increased 15% to $239 billion as of April 30.
“April saw a return to the liability-driven dynamics that characterized much of 2009,” John Ehrhardt, principal, consulting actuary and co-author of the Milliman 100 Pension Funding Index, said in a news release. “We saw positive asset movement in April but a significant increase in the pension benefit obligation that dwarfed the month’s investment gains. This explains how, despite an 18% cumulative asset return, we’ve still seen pension funded status decrease by $14 billion during the last 12 months.”
Given current interest rates, investment gains would need to reach 21.5% for the rest of 2010 to get the funded ratio up to 90%, according to the news release.
Mr. Ehrhardt could not be reached for further comment by press time.