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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