Public corporations with worldwide defined benefit plan liabilities of more than $20 billion saw the growth in liabilities outpace the growth of assets in 2011, according to a report from Russell Investments.
The report compiles information from the annual reports of the 16 firms that Russell calls the “$20 billion club.” They represent close to 40% of the total pension liabilities on all public U.S. corporate balance sheets. Of the 16 firms, all have fiscal years ending Dec. 31 except for Hewlett-Packard, whose fiscal year ends Oct. 31.
Combined assets for the firms totaled $625.8 billion at the end of 2011, up 1.7% from the end of 2010, while projected benefit obligations totaled $798.4 billion, up 8.4% from the previous year.
The Russell 1000 index returned 1.5% in the year ended Dec. 31.
The higher rate of the increase for liabilities is due to a decrease in the discount rates used to value future benefit payments, typically by around 75 basis points, according to the report.
The 16 corporations made a total of $20.3 billion in cash contributions to their plans in 2011.
A PDF copy of the report is available from Russell's website.