Liabilities have hit a new all-time high at the largestcorporate pension plans.

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That’s according to Russell Investments’ annual report on theperformance of what it calls the $20 billion club — 19 corporationswith worldwide pension liabilities exceeding $20 billion, whichtogether account for approximately 40 percent of the pension assetsand liabilities of all U.S. publicly listed corporations.

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At the beginning of 2014, the 19 “club” members had a combinedpension deficit of $114 billion, which is the lowest the total hasbeen since 2007. But despite strong market performance, by year-endthat deficit had ballooned to $183 billion.

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The cause? A double whammy: a drop in interest rates that no onesaw coming, and new actuarial assumptions about how long retireesmight be expected to live.

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Most of the time, according to the report, actuarial losses comemostly from interest rate increases or drops. And there wasdefinitely some of that in 2014, with the median discount used forU.S. plans falling by 0.83 percent to 4.02 percent. That meantliabilities were higher.

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But the biggest change came from the incorporation of the newmortality tables into the mix. At least 17 of the 19 club membersswitched to the new tables, which incorporate longer lifespans — inmost cases, according to the report, the RP-2014 table that wasrecently published by the Society of Actuaries. That switchoverboosted combined liabilities by another $29 billion.

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The previous liability high, said the report, came in 2012, whenit was spurred by falling discount rates. But the 2014 total isabout $23 billion higher.

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Employer contributions were also low — the lowest they’ve beensince 2008 — at $16.8 billion, as employers took advantage ofprovisions in the Highway Transportation and Funding Act of 2014,which cut required minimum contributions that plan sponsors mustpay for the next few years.

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One other factor to consider is the fact that many plan sponsorsare “derisking.” While none of the club members took that routelast year, “risk transfer — whether through annuity purchases orlump sums — is now an established practice among large pensionplans,” said the report.

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