BOSTON (TheStreet) -- The one-two punch of low bond yields and falling stocks are taking their toll on corporate pension plans.

The funded status of pension plans sponsored by S&P 1500 companies was 79% at the end of May, compared with 84% at the end of March, according to data released yesterday by Mercer. That equals an increase in aggregate pension deficits of $84 billion, from $252 billion at the end of March to $336 billion at the end of May.

The weighted average asset allocation of the plans included 50% in equities, 38% in fixed income, 3% in real estate and 9% in "other" categories. Because of the large share vested in equities, the 7% drop in the stock market over the past two months proved particularly damaging.

The poor prognosis comes after relative stability in 2009.

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Mercer's recently published report, How Does Your Retirement Program Stack Up? -- 2010, analyzed 10-K reports filed by S&P 1500 companies last year and found that the financial health of defined benefit plans improved from 2008. Pension deficits decreased by $14 billion during the fiscal year, and liability losses, mostly due to falling discount rates, offset otherwise positive asset performance.

Mercer's research also gave further evidence of the increasing use of direct contribution retirement plans as an employee benefit. Although direct benefit plans are more than twice as prevalent at large-cap firms as at small caps, direct contribution plans were equally common among all. In 2009, for the second consecutive year, companies spent more on 401(k) and other direct contribution plans than they did on pensions.

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