U.S. S&P 500 Pension Plans See $102 Billion Increase in Funded Deficit in the 3rd Quarter

Aon Hewitt analysis finds the overall deficit has increased by $40 billion for the year

LINCOLNSHIRE, Ill. (October 7, 2015) - 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 $102 billion in the third quarter of 2015, a shift from the previous quarter that saw the deficit decline by $81 billion. Year-to-date, the funded status deficit has increased by $40 billion.

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 83.5 percent to 78.7 percent. The change was largely driven by asset reductions of $79 billion along with liability increases of $23 billion year-to-date.


'Volatility in equity markets-particularly poor performance in August-drove the decline in funded status for the quarter,' said Ari Jacobs, Global Retirement Solutions leader at Aon Hewitt.

Third Quarter Findings:

- Return-seeking assets declined heavily. The Russell 3000 Index returned -7.2 percent.
- Bonds outperformed equities during the quarter, with the Barclay's Long Gov/Credit Index returning 2.2 percent over this timeframe.
- Overall pension assets returned -3.5 percent over the quarter.

Among private-sector defined benefit plans with glide paths in place, approximately 5 percent executed a de-risking transaction in the third quarter and the average size of those transactions was a 2.6 percent shift from return-seeking assets to liability-hedging.


ENDS


About Aon
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Media Contact:
MacKenzie Lucas, 847.442.2995, mackenzie.lucas@aonhewitt.com

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