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Thursday, 11 June 2015

US Pension Plans Face Serious Shortfalls Despite Long Bull Markets

$584.7B short: Pensions in bad shape

If you thought the raging bull market would fix pensions by now – you’d be wrong. Half a trillion dollars wrong.
Pensions and other post-employment benefits of the giant companies in the Standard & Poor’s 500 are underfunded to the tune of $584.7 billion – a 44% worsening from the $405.7 billion underfunding in 2013, according to a report released by S&P Monday. That means just 75% of the total obligations are covered, down from 81% in 2013. And just 4.5% of pension and post-employment benefit plans are fully funded, down from the 8.4% that were in 2013.

Total assets set aside for pensions and post-employment benefits plans grew just 3.5% in 2014. The trouble is that obligations shot up 11.3% to a record $2.34 trillion. That’s a mess. Making pensions are still reeling from the 37% hit they took amid the 2008 market meltdown. Read More.

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