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Laxman Pai, Opalesque Asia: Last year marked the strongest year for corporate pension plans since before the financial crisis of 2007, said a study.
According to an analysis by Willis Towers Watson, the aggregate pension funded status of U.S. defined benefit pension plans is estimated to be 96% at the end of 2021, up sharply from 88% at the end of 2020. That is the highest funded status since 2007, the last year defined benefit plans of the Fortune 1000 were fully funded.
The global advisory firm analyzed pension plan data for 361 Fortune 1000 companies that sponsor the U.S. defined benefit pension plans and have a December fiscal year-end date.
The analysis also found the funding deficit is projected to be $63 billion at the end of 2021, significantly less than the $232 billion deficit at the end of 2020. Pension obligations decreased 8% from $1.89 trillion at the end of 2020 to an estimated $1.74 trillion at the end of 2021.
"Defined benefit plan sponsors made great headway in 2021 on their path toward full funding, something many plans haven't experienced since before the 2008 financial crisis," said Joseph Gamzon, managing director, Retirement, Willis Towers Watson. "And since 2008, many sponsors have better positioned their plans relative to market risk, primarily through changes in investment allocation and settlement activity."
According to the analysis, pension plan assets increased slightly (1%) in 2021 finishing the year at $1.67 trillion. Overal...................... To view our full article Click here
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