(April 3, 2013) — S&P 1500 Pension schemes saw their deficits lessen in Q1 of 2013, but investment consulting firm Mercer has warned the sponsoring companies to hold the champagne for the time being.
Improved equity returns and a greater level of employer contributions resulted in $107 billion collectively being wiped off the deficits, leading the funded ratio to improve to 82% at the end of March, compared to 77% at the end of February.
Equity growth rose by 3.75% in March, but the real helping hand came from the sponsors of the schemes, who found $80 billion to put into their plans – $20 billion more than they expected to be able to contribute.
However, schemes also witnessed a positive Q1 in 2011 and 2012, only to fall back later on in the year.
Jonathan Barry, partner at Mercer’s retirement business warned there was still some “heavy lifting” for employers before schemes reach their fully funded status.
The estimated aggregate value of pension plan assets of the S&P 1500 companies is currently $1.68 trillion, with liabilities of $2.05 trillion.