Report: Record Pension Underfunding of S&P 500 Companies

The underfunding of pensions and other post-employment benefits (OPEBs) for companies listed in the S&P 500 increased to $687 billion for fiscal 2012, despite strong gains in the equity markets that year, according to a new report by S&P Dow Jones Indices. That's an increase of almost 19% from the previous year.

Defined pensions were underfunded by $451.7 billion in 2012, up from $354.7 billion in 2011, and $245 billion in 2010. OPEBs were underfunded by $234.9 billion in 2012, $223.4 billion in 2011, and $210.1 billion in 2010.

In total, retirement obligations for the S&P 500 companies were only funded at a 70% rate, according to the report..

"The double-digit equity gains of 2012 were no match for the artificially low interest rates which vaulted pension liabilities into record underfunding territory," said report author Howard Silverblatt, senior index analyst at S&P Dow Jones Indices, in a statement.

Current retirees shouldn't be worried, said Silverblatt, but "our future retirees, whose benefits have been reduced or cut ... will need to find a way to supplement, or postpone, their retirement."


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  • Report this Comment On July 31, 2013, at 5:44 PM, KUBLOTNIK wrote:

    ALL PENSIONS are underfunded !! consider inflation which has caused the devaluation of the dollar. almost everything we buy has risen since 2001 by 100%. .food, trans. , fuel, housing, healthcare etc. the gov.says there is no inflation.what a lie.!! they blame it on the EVIL BIG CORP. LIKE OIL. how about the EVIL BIG GOVERNMENT that is borrowing 42% of every is that going to play out when that bill comes due??are we going to become like germany 1920s,or china 1940s,or zimbabwe today??. what will happen if the gov.declaires an emergency and steals all the 401k money.

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