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PBOs are increasing, continue to hit the corporate bottom line

U.S. corporations* with underfunded defined benefit plans saw their situations improve by an average $102 million in 2017 from 2016, while overfunded plans saw their funded status dip by about $19 million over the same period. The median corporate plan was underfunded by $129 million.

At the end of 2017, there were 460 companies in the Russell 1000 that maintained a DB plan, down from 505 in 2010. Total plan benefit obligations were about $2.27 trillion, with a median value of $1 billion.

The majority of companies with pension plans are among the largest by market cap, and therefore showed higher absolute operating incomes over the observed period. However, the year-over-year growth of the total operating income was stronger among the index constituents without defined benefit plans.

*Russell 1000 constituents as of May 31