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The heyday of U.S. corporate pension plan funding ended in 2007,when the aggregate level of funding was 106%, according to ananalysis by Willis Towers Watson, a global advisory company.

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And though corporate funding of pensions is much better thanpublic employee pension funding, the 2018amount dropped slightly to 84% from 85% in 2017.

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“Pension plans had been on track for another year of improvedfunding through the third quarter of 2018 as a result of higherinterest rates, relatively stable equity markets and solidcontributions,” said Jennifer DeMeo, senior consultant at WillisTowers Watson, in a statement. “However, the steep declines in theequities markets during the fourth quarter, particularly inDecember, negated what had been a very positive year.”

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The analysis of 389 Fortune 1000 companies that sponsor U.S.defined benefit pension plans and have aDecember fiscal-year-end date found a projected deficit of $255billion at year end, slightly less than the $260 billion deficit in2017.

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Other findings:

  • Pension plan assets fell to an estimated $1.33 trillion at theend of 2018 from $1.48 trillion at the end of 2017. Total pensionobligations declined to an estimated $1.59 trillion in 2018 from$1.74 trillion in 2017.
  • Overall investment returns were estimated to average a negative4.7%, although returns varied by asset class. Domestic large-capequities lost 4%, while small/mid-caps lost 10% on average. Longcorporate bonds lost 7%, while long government bonds lost 2%,according to the analysis.
  • Company contributions were $47 billion in 2018. Willis TowersWatson stated that many plan sponsors took advantage of the largertax deduction due to the new tax law.

READ MORE:

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Higher fees don't help pension plans beatbenchmarks

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10 states with the best pension funding: a tale oftwo discount rates

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Pension funds hold 'majority of most influentialcapital'

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5 worst, best states for pensionfunding

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Ginger Szala

Ginger Szala is executive managing editor of Investment Advisor magazine. She covered the financial business and alternatives industry for 30 years while editor of Futures Magazine Group. MSJ Northwestern, BA University of Wisconsin-Madison. She is based in Chicago. Go Blackhawks!