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Underfunded Pension Liabilities Grow

Underfunded Pension Liabilities Grow
August 6, 2012 Jon Schildt

A release by Milliman – an independent actuarial firm – shows that for the 100 largest corporate defined benefit plans in the country, pension liabilities as a whole grew in July.  Milliman explains that liabilities rose by $133 billion in July, while gains on investments were only $13 billion.  This increased the total unfunded amount to $533 billion for the segment studied.  In another news release, the Governor of Illinois explained that without pension reform, Illinois may spend more on pension liabilities than on education in 2016 to begin to make up their shortfall.

With pension funding becoming a heated topic, Calculated Risk Advisors explains that an underfunded pension liability can impact a firm greatly.  The firm administrators, sponsors and fiduciaries are at risk of a lawsuit if a pension cannot meet its obligations.  A funding shortfall can also impact the valuation of a firm as it looks to be acquired.  To learn more about how to protect yourself from these scenarios, contact a broker at Calculated Risk Advisors today.