<nobr>Mar 4, 2009</nobr>

Milliman Says Contributions Expected to Double for Pensions in 2009

Milliman reports in the latest update to the Milliman 100 Pension Funding Index of 100 of the nation's largest defined benefit pension plans that January 2009 saw a continuation of the past year’s general trend of declines in funded status.

The net result of the funded status for the pensions sponsored by these companies dropped by $23 billion during January, according to the report. The assets of the plans suffered investment losses of $49 billion during January, and were partially offset by liability decreases of roughly $26 billion due to increases in discount rates.

Over the past 12 months -- from February 2008 to January 2009 -- the cumulative asset return has been negative 22 percent and the funded status has fallen by $308 billion. For this 12-month period, the funded ratio of the Milliman 100 companies has fallen from 99.8 percent to 74.9 percent, down from 77.2 percent at the end of 2008 and 104.9 percent at the end of 2007.

As a result of last year's asset losses, Milliman says it expects employer contributions to almost double in 2009. With these increased contributions along with an expected return of 8.3 percent and a discount rate of 6.51 percent for the balance of 2009, the funded status of the Milliman 100 is projected to increase by $5 billion with a funded ratio of 75.7 percent on December 31, leading to a projected pension deficit of $305 billion at year's end.

Websites:

Milliman 100 Pension Funding Index (January)

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