The funding ratio of the typical U.S. corporate defined benefit pension plan dropped four percentage points to 91% in the first quarter, according to a report from UBS Global Asset Management.
The drop from 95% at the end of 2013 was due to investment returns that could not keep pace with rising liabilities, according to the UBS Pension Fund Fitness Tracker.
The typical plan had investment returns of 2.1% in the first quarter, outperforming the S&P 500 index, which had a total return of 1.81% during a volatile quarter.
However, the typical plan's liabilities increased 6.1% because of the tightening of high-quality corporate bond credit spreads, which led to lower pension discount rates.
UBS spokeswoman Karina Byrne did not return a phone call seeking further information by press time.