Market Tumble, Recovery Took Corporate Pensions on $37 Billion Ride

Last week’s tumultuous market – in which major indices endured one day of freefall before enjoying two days of recovery – took corporate pensions on a wild ride. Aon Hewitt recently assigned dollar values to those swings.

From the Wall Street Journal:

The S&P 500 companies started off the week with a collective pension-funding deficit of roughly $425 billion, an improvement of about $29 billion from a year earlier, according to employee benefits adviser Aon Hewitt.

But, as the Dow Jones Industrial Average tumbled more than a thousand points on Monday, Aug. 24, that deficit widened by $13 billion to $438 billion, the largest such gap since February.

When the market rebounded on Tuesday and Wednesday, pension plans gained back $37 billion.

“Things calmed down and reversed to the point where pension plans were actually a little better off by the end of the week than the beginning,” said Joe McDonald, an Aon Hewitt senior partner.

Pension360 has already covered the seriousness of the swings for corporate pensions whose fiscal years ended on August 31.

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