Jul 20, 2012 --- A report
from S&P Dow Jones Indices reveals record pension and other post-employment
benefits (OPEB) underfunding for the S&P 500 companies. ---
Data for fiscal 2011 shows that S&P 500 defined benefit
pensions reached an underfunding status of $354.7 billion in 2011, an increase
of over $100 billion from the end of 2010 and surpassing the record $308.4
billion underfunding level set in 2008. OPEB underfunded levels increased to
$223.4 billion in 2011 from $210.1 billion at the end of
Combined, the amount of assets that S&P 500 companies
set aside to fund pensions and OPEB was $1.38 trillion, covering $1.96 trillion
in obligations with the resulting underfunding equating to $578 billion, or a
70.5% overall funding rate.
The report also shows that estimated pension return rates
declined for the 11th consecutive year, dropping to an estimated 7.60% in 2011 vs.
7.73% in 2010 and 7.83% in 2009. Discount rates declined for the third year in
a row, falling 60 basis points to 4.71% from 5.31% in 2010, significantly
increasing projected obligations.
Within the S&P 500, 292 companies offered OPEBs in 2011.
With $285.6 billion in OPEB obligations, only $62.3 billion was funded, pushing
OPEB funding levels down to 21.8% from the 23.5% registered in 2010.
The report, “S&P 500 2011: Pensions and Other Post
Employment Benefits (OPEB),” can be accessed here.