Corporate Pension Funding Stood Mostly Pat in 2015

Going into 2016, the collective funding status of the U.S.’ largest corporate DB plans remains largely the same as at the beginning of 2015, according to a new analysis by Towers Watson.

From a release:

Results indicate that the aggregate pension funded status is estimated to be 82% at the end of 2015, which is the same as it was at the end of 2014. The analysis also found that the pension deficit narrowed modestly by $28 billion to $291 billion at the end of 2015, compared to a $319 billion deficit at the end of 2014.

“An increase in corporate bond rates in advance of the Fed’s recent interest rate decision, combined with a flat global stock market, contributed to keeping pension plans in roughly the same financial shape as the previous year,” said Alan Glickstein, a senior retirement consultant at Towers Watson. “While pension obligations declined last year, so did assets. There was a lot of movement in the funded status throughout the year, but at the end of the year, essentially nothing changed overall. In contrast, the preceding two years were more volatile, one up and one down.”

According to the analysis, pension plan assets fell by an estimated 6% in 2015, from $1.41 trillion at the end of 2014 to an estimated $1.33 trillion at the end of last year.

The report uses data from 413 Fortune 1000 companies with defined-benefit pension plans.

Photo by Sarath Kuchi via Flickr CC License