Practice Management
Estimated aggregate funding of pension plans that Standard & Poors (S&P) 1500 companies sponsor increased by 4% in August, according to a new study.
Mercer reports that aggregate funding for those plans rose to 83% in August. They attribute the improvement to an increase in discount rates and equity markets.
Mercer provides some more detailed estimates concerning the changes in the value, liabilities and deficits of pension plans in the S&P 1500 from July 31 to Aug. 31:
| Measure | July 31 | August 31 | Change, July 31-August 31 |
| Aggregate Value | $2.11 trillion | $2.12 trillion | +$10 billion |
| Aggregate Liabilities | $2.67 trillion | $2.55 trillion | - $120 billion |
| Aggregate Deficit | $557 billion | $433 billion | - $124 billion |
The change in funded status for the pension plans of the S&P 1500 was the “best single-month improvement in five years,” said Matt McDaniel, a partner at Mercer and head of its U.S. Financial Strategy Group. He added, however, that even with the dramatic month-to-month improvement the funded status by the end of August below what it was at the start of 2020.
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