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Nation's Pension Plans Have $217 Billion Shortfall

Apparently you weren't the only one living on the "get it now, pay later" plan, huh? Last year's stock market collapse left the nation's largest priv

Apparently you weren't the only one living on the "get it now, pay later" plan, huh?

Last year's stock market collapse left the nation's largest private pension plans with a deficit of more than $200 billion, a study released Wednesday said, which could force companies to invest more money in their plans when they can least afford it.

The nation's 100 largest corporate pension plans were underfunded by $217 billion at the end of 2008, holding only 79% of the assets needed to cover estimated long-term liabilities. That compares with an $86 billion surplus — 109% of estimated liabilities — at the end of 2007, according to Watson Wyatt, a human resources consulting firm.

Pension plans' assets fell 26% last year, primarily because of investment losses, the study said. A separate study released Wednesday by Milliman said the nation's largest plans lost an additional $54 billion in February.

It's not unusual for companies to have underfunded pension plans, and the deficit typically doesn't affect payouts to near-term retirees. But to avoid future problems, companies with underfunded pensions are required to increase contributions.

Companies are also facing stricter federal funding requirements for pensions, says David Speier, senior retirement consultant at Watson Wyatt. "This combination will require employers to make staggering pension contributions over the next couple of years, at a time when they can least afford them."

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