Study: Pension Funding Regains Some Ground

By John S. McClenahen Although underfunded pension plans remain an employee concern and a few firms have lately talked of curtailing pension contributions, a study from Watson Wyatt indicates the funding of large-company pension plans improved last year. The consulting firm found that "funded status" of large-company pension plans improved to an average of 88% in 2003 from an average of 82% in 2002. Funded status is the ratio of the value of a plan's assets to the estimated cost of its obligations. Between 2002 and 2003, the liabilities of the pension plans Wyatt Watson studied increased about 11% (nearly $125 billion) as assets rose about 18% ($172.4 billion). The analysis is based on information for defined-benefit pension plans at 622 of the 1,000 largest U.S. companies.

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