Pension Shortfall Widens Even With The S&P Rising

Posted By on November 25, 2010

Inquiring minds want to know….how do we ever close this gap!

Corporate pensions in the Standard & Poor’s 500 Index with about $1 trillion in assets are now 77 percent funded this year, down from 82 percent at the end of 2009.  The $380 billion pension shortfall is the biggest since at least 1994, according to  David Bianco, chief U.S. equity strategist at Bank of America Merrill Lynch.

The pension plans have a median 8.1 percent expected rate of return. During the past 12 months, assets in the plans returned 11.4 percent while the funding status dropped $21 billion, “due primarily” to lower discount rates.

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