Low Interest Rates Widen Pension Funding Deficit By $74B
|PR Newswire Association LLC|
"It was a good year on the asset side, with these pensions experiencing a
In December, the discount rate used to calculate pension liabilities increased from 4.05% to 4.18%, decreasing the PBO from
Looking forward, if these 100 pensions were to achieve their expected 7.8% median asset return and if the current discount rate of 4.18% were to be maintained throughout 2013 and 2014, these pensions would improve the pension funded ratio from 76.4% to 81.0% by the end of 2013 and to 85.7% by the end of 2014.
These year-end figures are only tentative, and will be revisited when the 2013 Milliman Pension Funding Study is completed in March. De-risking activities made by some of these companies will probably lower asset and liability figures, which we expect to have a slightly negative impact on the overall funded status of these plans.
For the past 12 years,
The results of the