Practice Management
The largest U.S. corporate defined benefits (DB) plans took a hit in the first quarter of 2020, according to a recent report.
The aggregate funded status of the 376 Fortune 1000 companies sponsoring DB plans by the end of first quarter of 2020 stood at 79%, an eight percentage point drop from the funding level of 87% at the end of 2019, Willis Towers Watson estimates.
Pension assets for those 376 plans fell during the first quarter, the report discloses.
Pension assets for those 376 plans fell during the first quarter, the report discloses.
| Measure | March 31, 2020 | Dec. 31, 2019 | Difference, Dec. 31-March 31 |
| Pension assets | $1.4 trillion | $1.52 trillion | -$120 million |
The report further says that the pension deficit and pension obligations grew in the first quarter as well.
| Measure | March 31, 2020 | Dec. 31, 2019 | Difference, Dec. 31-March 31 |
| Pension Deficit | $365 billion | $229 billion | +136 billion |
| Pension Obligations | $1.76 trillion | $1.75 trillion | +$10 million |
The aggregate funded status levels Willis Towers Watson estimates for the first quarter are the lowest since 2012, when they stood at 77%. Further, they estimate that overall investment returns fell by 7%. However, the report notes, the drop in overall investment returns was not uniform; it varied greatly according to asset class. Similarly, rates and credit spreads were volatile.
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