LINCOLNSHIRE, Ill. (July 8, 2016) – According to an analysis from Aon Hewitt, the global talent, retirement and health solutions business of Aon plc (NYSE:AON), the funded status deficit of U.S. pension plans increased by $48 billion in the second quarter of 2016 due primarily to continued declines in interest rates. When combined with the $81 billion deficit increase in the first quarter, the funded status deficit has increased by $128 billion year to date.
Data from the Aon Hewitt Pension Risk Tracker, which evaluates daily funded status for S&P 500 companies with defined benefit pension plans, shows the aggregate funded ratio decreased from 78.2 percent to 76.7 percent in the second quarter. The funding deficit was largely driven by a liability increase of $74 billion, which was offset by asset gains of $26 billion.
“While the United Kingdom’s vote to leave the European Union capped off a volatile first half of 2016, the low interest rate environment continued to drive an increase in pension liabilities,” said Ari Jacobs, Global Retirement Solutions leader at Aon Hewitt. “Continued volatility and expectations that central banks will keep rates low for a longer period highlight the ongoing challenges facing pension plan sponsors and underscore the need for a holistic de-risking strategy.”
Second Quarter Findings:
In June, the S&P 500 aggregate pension funded status decreased from 78.0 percent to 76.7 percent.
Aon plc (NYSE:AON) is a leading global provider of risk management, insurance brokerage and reinsurance brokerage, and human resources solutions and outsourcing services. Through its more than 69,000 colleagues worldwide, Aon unites to empower results for clients in over 120 countries via innovative risk and people solutions. For further information on our capabilities and to learn how we empower results for clients, please visit: http://aon.mediaroom.com.
MacKenzie Lucas, 847.442.2995, firstname.lastname@example.org