This Day On The Street
Continue to site
ADVERTISEMENT
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here

Wilshire Consulting Report Shows 94 Percent Of Corporate Pension Plans Remain Underfunded

SANTA MONICA, Calif., April 8, 2013 (GLOBE NEWSWIRE) -- Despite the strong performance of U.S. equity markets in 2012, the number of U.S. corporate defined benefit pensions that were underfunded remained at 94 percent -- unchanged from 2011-- as market interest rates worked against the plans' funding ratios, according to the 2013 Wilshire Consulting Report on Corporate Pension Funding Levels . This is the thirteenth corporate funding report issued by Wilshire Consulting, the institutional investment advisory and outsourced-CIO business unit of Wilshire Associates Incorporated (Wilshire®), a diversified global financial services firm.

"As market-based discount rates moved lower, it increased these plans' accounting liabilities pushing the aggregate funding ratio, which we arrive at by dividing assets by liabilities, for all plans combined down from 79.7 percent to 78.1 percent and the -$282.3 billion funding shortfall at the beginning of the year expanded to a -$342.5 billion deficit," said Russ Walker, vice president, Wilshire Associates, and an author of the report. "Interest rates used to discount future benefits fell again during 2012, contributing to the overall increase in pension liabilities for the year. The median discount rate fell from 5.00 percent to 4.16 percent, while total liabilities increased 12.5 percent for the year, he added.

"Defined benefit pension assets for S&P 500 Index companies increased by $113 billion, from $1.11 trillion to $1.22 trillion, while liabilities increased $174 billion, from $1.39 trillion to $1.56 trillion. The median corporate funded ratio is 76.9 percent, which represents a modest decline from 77.7 percent last year," Walker noted.

The defined benefit plans in Wilshire's study yielded a median 11.8 percent rate of return for 2012. This strong performance combines with the 3.6 percent median plan return for 2011, the 11.9 percent median plan return for 2010 and the 16.0 percent median plan return for 2009 to mark four consecutive years of gains for these plans after the global market dislocation events of 2007 and 2008.

1 of 2

Check Out Our Best Services for Investors

Action Alerts PLUS

Portfolio Manager Jim Cramer and Director of Research Jack Mohr reveal their investment tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
Quant Ratings

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
Stocks Under $10

David Peltier uncovers low dollar stocks with serious upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
14-Days Free
Only $9.95
14-Days Free
Dividend Stock Advisor

David Peltier identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Updates with exact steps to take - BUY, HOLD, SELL
Trifecta Stocks

Every recommendation goes through 3 layers of intense scrutiny—quantitative, fundamental and technical analysis—to maximize profit potential and minimize risk.

Product Features:
  • Model Portfolio
  • Intra Day Trade alerts
  • Access to Quant Ratings
Options Profits

Our options trading pros provide over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

Product Features:
  • Actionable options commentary and news
  • Real-time trading community
SYM TRADE IT LAST %CHG

Markets

Chart of I:DJI
DOW 17,550.69 -47.51 -0.27%
S&P 500 2,093.32 -4.72 -0.22%
NASDAQ 5,105.5460 -9.8360 -0.19%

Free Reports

Top Rated Stocks Top Rated Funds Top Rated ETFs