Accounting Policy Update: Big contributions to pension plans, but still underfunded

Sponsors shoveling assets into DB plans
Corporate plan sponsors have increased contributions into defined benefit pension plans during 2009 in an effort to offset the reduction in funded status in 2008. We expect contributions to US plans of S&P 500 companies to be as much as $65 billion in 2009, the highest level since 2003.

Funded status improving slowly
We estimate funded status for US plans of S&P 500 companies at about 85% as of the end of August 2009, an increase from the 2008 year-end level of 79%. Notable contributions into some plans and rising financial asset prices have boosted plan assets. However, flat-to-down YTD long-term corporate interest rates have kept liabilities elevated, hindering further improvement to funded status.

>> Accounting Policy Update: Big contributions to pension plans, but still underfunded  September 2009 [PDF, 626 KB]