Compliance

Mercer Analysis Pension Plans Improve Funded Status

By Staff Report

Jan. 5, 2010

U.S. pension plans’ funded status improved to 85 percent with a deficit of $225 billion at the end of 2009, compared with a funded status of 75 percent and a deficit of $409 billion at the end of 2008, according to a Mercer analysis released Monday, January 4.


Adrian Hartshorn, a New York-based member of Mercer’s Financial Strategy Group, said in a statement that the improved funding statement status will help pension fund earnings and reduce the need for future cash contributions.


“However, in 2010, some companies may see increased cash contribution requirements or higher [Financial Accounting Standards Board] pension expenses because of smoothing methods, which deferred 2008 losses,” Hartshorn said.


Hartshorn said one reason for the improvement in funding in 2009 is higher corporate bond yields, which has reduced pension plans’ liabilities. A second is the rise in stock market values over the past 12 months.


The Mercer analysis says most plan sponsors continue to have assets invested predominantly in return-seeking assets, mainly equities. As a result, pension plans’ funded status is likely to remain volatile, Mercer said.


Filed by Judy Greenwald of Business Insurance, a sister publication of Workforce Management. To comment, e-mail editors@workforce.com.


Stay informed and connected. Get human resources news and HR features via Workforce Management’s Twitter feed or RSS feeds for mobile devices and news readers.

What’s New at Workforce.com?

blog workforce

Come see what we’re building in the world of predictive employee scheduling, superior labor insights and next-gen employee apps. We’re on a mission to automate workforce management for hourly employees and bring productivity, optimization and engagement to the frontline.

Book a call
See the software

Related Articles

workforce blog

Compliance

Minimum Wage by State in 2023 – All You Need to Know

Summary Twenty-three states and D.C. raised their minimum wage rates in 2023, effective January 1.  Thr...

federal law, minimum wage, pay rates, state law, wage law compliance

workforce blog

Compliance

Exempt vs. non-exempt employees: knowing the difference

Summary Employees are exempt from FLSA requirements when they meet specific exemption criteria based on...

Department of Labor, exempt employees, Misclassification, non-exempt employees

workforce blog

Compliance

California fast food workers bill: why it’s more than meets the eye and how to prepare

Summary: California signs bill establishing a “fast food council” that has the power to raise the indus...