Pension plan funding hit a two-year high in May, with companies responding to a Mercer survey reporting their plans were 86 percent funded.
That's the highest level since June 2011, when companies reported their plans were 86 percent funded. In April, the funding level clocked in at 80 percent.
The survey includes companies in the S&P 1500.
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The aggregate deficit of the reporting companies decreased by $150 billion, to $269 billion.
Mercer said the strength of the stock market, where equities increased by 2.3 percent in May, drove the improving asset levels of the plans. Additionally, Mercer cited a 46 basis point rise in high quality corporate bond rates for the 7 percent reduction in estimated liabilities between April and May.
"We have seen great leaps in funded status in the first half of 2013, and sponsors will certainly be hoping for more of the same over the coming months." said Jonathan Barry, a partner in Mercer's Retirement business.
"This improvement dovetails nicely with feedback we are getting from clients who have implemented a glide path strategy – they are reaping the rewards of this rapid improvement and locking in the gains."
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Dan Cook
Dan Cook is a journalist and communications consultant based in Portland, OR. During his journalism career he has been a reporter and editor for a variety of media companies, including American Lawyer Media, BusinessWeek, Newhouse Newspapers, Knight-Ridder, Time Inc., and Reuters. He specializes in health care and insurance related coverage for BenefitsPRO.
