we dream, we create, we change, we love

2014 Pension PBO Funded Ratio

leave a comment »

Pension PBO FR 2014 all fy+1 (275)As I’ve been separately exploring in a post looking at plan assets and projected benefit obligations for defined benefit pension plans sponsored by public U.S. corporations, during 2014 the increase in obligations due to lower interest rates outpaced investment gains in assets. The result: a drop in the aggregate pension plan funded ratio, reversing roughly two thirds of the increase in pension funded ratio experienced during 2013.

This chart shows the aggregate global pension plan funded ratio determined on the basis of projected benefit obligations for 1995 through 2014 for 275 companies, including employers with calendar fiscal years as well as non-calendar fiscal years. The data set for this chart uses a fiscal year shift of one month: companies with a fiscal year ending in January are treated as if in the preceding calendar year.

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): (1) these numbers include not only domestic pension plans, but also foreign pension plans, which generally have lower funded ratios than do U.S. pension plans; (2) the numbers include unfunded deferred compensation plans, for which the funded ratio is of course 0%; and (3) PBO numbers include the effect of future compensation increases, producing lower funded ratios than for measurement of the funded status of currently accrued benefits. Which I’ll sort out in future revisions to this post.

I’ll continue to update this post as further 10-k reports for early 2015 fiscal years are filed, and as I continue collecting data filed in 2014. Earlier versions of this post will be retained in backpages, as linked in the numbers at the bottom of this post, with oldest versions carrying the higher numbered links. 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 275 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.)

actuary cat feed subscribe to aftermath’s άctuary category

bumper sticker [] - άctuary

Pages: 1 2 3 4

Written by macheide

9 February 2015 at 8:20 pm

Posted in άctuary

Tagged with


Please log in using one of these methods to post your comment: Logo

You are commenting using your account. Log Out /  Change )

Google photo

You are commenting using your Google account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s