US - The funding levels of plans in the S&P 500 index have are saddled with pension deficits worth US$274.5bn, down from a surplus of nearly $95bn the prior year, a Wilshire Associates report reveals.
The report said: "The (increase) reflects a general pattern of over contributing relative to the level of service costs in years where funding levels are below 100%, indicative of an effort to reach 100% funding."
Bank of America, for example, made no contributions to its pension fund in 2007 when the scheme was 132% funded, but made $1.4bn in contributions in 2008, according to the report.
Funding ratios among the 323 companies reviewed by Wilshire dropped to 80.6% in 2008, down from a surplus of 107.9% the previous year and Wilshire found that 92% of plans are underfunded, 30 percentage points higher than in 2007.
"Pension assets decreased significantly in concert with the broad-based deleveraging in the global financial markets," the report said.
The median 2008 investment return was -27.4% vs. positive returns of 8.2%.
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