Pensions: plan funding improved in 2003, study shows.

• Author: Marshall, Jeffrey
• Position: BusinessBriefs - Brief Article

The funding of large company pension plans improved last year, despite significant increases in pension plan liabilities, finds a recent analysis by Watson Wyatt Worldwide.

The human capital consulting firm found that the funded status of large-company pension plans improved from an average of 82 percent in 2002 to 88 percent in 2003. The funded status of a pension plan is the ratio of the value of its assets to the estimated cost of its accrued pension obligations.

During this period, pension plan liabilities increased by nearly $125 billion, or about 11 percent, but assets rose by $172.4 billion, or about 18 percent. The analysis was based on information for defined benefit pension plans at 622 of the nation's 1,000 largest companies.

"After three years of low interest rates and weak investment...