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2014 Pension MVA & PBO

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Pension_MVA&PBO_201412_6coAs of 6 Feb 2015: 10-k filings for public companies with calendar fiscal years are beginning to trickle in. So far, I have reports for only 6 of those companies with defined benefit pension plans, but already that small sample is showing the primary funding status trends for 2014 that I had been forecasting in family discussions after last Thanksgiving’s dinner: asset increases on pace with the gains of 2013, but even greater increases in projected benefit obligations due to significant declines in discount rates.

This chart shows results for the past 15 years for those 6 companies, from yearend 2000 through yearend 2014, with red squares representing aggregate projected benefit obligations and blue diamonds representing aggregate market value of assets.

Remember my usual general cautionary notes (things that keep getting forgotten or shoved to very tiny print in footnotes in most of the industry reports on this sort of info): these numbers include both domestic and foreign pension plans; the numbers include unfunded deferred compensation plans; and the PBO numbers include the effect of future compensation increases. Which I’ll sort out in future posts, but essentially significantly dampening the degree to which current pension liabilities diverged from pension assets, if one means to be be looking solely to qualified domestic pension plans.

I’ll be updating this post as more 10-k reports are filed through the remainder of February 2015, then into March and beyond. But as I’ve indicated, the trends for any large group of companies — for instance, pension plan sponsors among the S&P 1500, which is a sample size I’ll have collected before leaving this year’s data set behind — will be very much like the chart shown for these 6 companies.

(As I’ve previously disclaimed, posts such as this represent efforts of my favorite pastime. My formal work does not involve any of this, and none of it represents any position or comment that should in any way be attributed to my employer. Likewise, as always, it represents general personal impressions and should not be treated or used as formal professional advice.)

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Written by macheide

7 February 2015 at 12:05 pm

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