Sponsors of the 20 largest corporate pension funds entered the fourth quarter in 2018 poised for a banner year, as strong equity markets, rising interest rates, and billions in discretionary cash contributions pushed the aggregate funding level to 90 percent, a level not seen in a decade.
But after positive returns in the first three quarters of 2018, the S&P 500 ended up down nearly 7 percent, the first time in history the index took a loss for a year in which it saw gains in the first three quarters. The S&P shed nearly 8 percent in December, the worst performance for the month since 1931.
All told, global equities lost 13 percent in value in Q4, negating most of the largest pensions' growth in funded ratios for the year, according to Russell Investments' annual $20 Billion Club report, which tracks pensions with $20 billion or more in liabilities.
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