According to Milliman, global consulting and actuarial firm, November brought $95 billion loss in pensions, dropping pension funding to 84.7%, an almost 20-percentage-point decline from the funded ratio at the beginning of the year.
Milliman revealed the figures mentioned above in its latest update to the Milliman 100 Pension Funding Index, which consists of 100 of the nation’s large defined benefit pension plans. Assuming no return and stable discount rates for the rest of the year, these pensions are on pace to reach a 84.1% funded ratio by 31 December, a pension deficit of $180 billion and an annual surplus loss of $241 billion.
“In the last few months asset losses have been tempered by liability gains, but that was not the case in November,” says John Ehrhardt, co-author of the Milliman 100 Pension Funding Index. “The losses suffered in November are the highest so far this year and will result in a $60 billion hit to earnings in 2009.”
L.D.