2010 pension preview: Headwinds remain despite funded status improvement

Notable contributions boost funded levels - The aggregate funded level of US pension plans for S&P 500 companies rose to about 87% in 2009, up from 79% at year-end 2008. Strong asset returns and large voluntary contributions helped increase funded levels, even though the low discount rate worked in the opposite direction. Contributions perhaps as high as $65 billion, spurred in part by attractive stock prices in 1H 2009, could make 2009 the strongest year this decade for contributions. Significant pension contributions may also occur in 2010 as cash-rich companies continue to make voluntary additions and as mandated contributions increase due to the underfunding that began in 2008. Many companies will also still see pension expense rise given the multi-year recognition of these costs under FAS 87.

>> 2010 pension preview: Headwinds remain despite funded status improvement  December 2009 [PDF 689 KB]