Mercer | S&P 1500 Pension Funded Status for November 2016

Mercer | S&P 1500 Pension Funded Status for November 2016

S&P 1500 Pension Fund Deficits Reduced by 20 Percent Following U.S. Election

  • December 6, 2016
  • United States, New York

The estimated aggregate funding deficit of pension plans sponsored by S&P 1500 companies reduced by 20 percent during the month of November 2016. This brought current funded status to 81 percent at the end of November, as an increase in discount rates was mildly offset by mixed equity markets. As of November 30, 2016, the estimated aggregate deficit of $414 billion USD represents a decrease of $116 billion as compared to the end of October 2016. However, the aggregate deficit is still up $10 billion USD from the $404 billion USD deficit measured at the end of 2015, according to Mercer,[1] a global consulting leader in advancing health, wealth and careers of individuals, and a wholly-owned subsidiary of Marsh & McLennan Companies (NYSE: MMC). 

The S&P 500 index gained 3.4 percent and the MSCI EAFE index lost 2.2 percent in November. Typical discount rates for pension plans as measured by the Mercer Yield Curve increased by 45 basis points to 4.11 percent. 

“The surprising election win by Donald Trump appears to have started the long awaited increase in long term interest rates which has greatly increased the funded status of pension plans,” said Jim Ritchie, Partner, Mercer’s Retirement business. “Donald Trump’s promises of lower taxes and higher infrastructure spending are being credited for the recent increase in long term rates, which are up approximately 40 basis points since the election. Plan sponsors should take a serious look at their de-risking strategies with the focus on whether this rise in rates is temporary or a long term trend. Either way, plan sponsors will want to have a solid strategy in place to take advantage of these higher rates.” 

Mercer estimates the aggregate funded status position of plans sponsored by S&P 1500 companies on a monthly basis. Figure 1 (below) shows the estimated aggregate surplus/(deficit) position and the funded status of all plans sponsored by companies in the S&P 1500. The estimates are based on each company’s latest available year-end statement[2] and by projections to November 30, 2016 in line with financial indices. The estimates include US domestic qualified and non-qualified plans and all non-domestic plans. The estimated aggregate value of pension plan assets of the S&P 1500 companies as of October 31, 2016 was $1.82 trillion USD, compared with estimated aggregate liabilities of $2.35 trillion USD. Allowing for changes in financial markets through November 30, 2016, changes to the S&P 1500 constituents, and newly released financial disclosures, at the end of November the estimated aggregate assets were $1.80 trillion USD, compared with the estimated aggregate liabilities of $2.21 trillion USD. Figure 2 shows the discount rates used in Mercer’s pension funding calculation. 

Notes for editors 

Information on the Mercer Yield Curve is available at

The Mercer US Pension Buyout Index may be accessed at 

Unless otherwise stated, the calculations are based on the Financial Accounting Standard (FAS) funding position and include analysis of the S&P 1500 companies. 

Figure 1 : Estimated aggregate surplus/(deficit) position and the funded status of all plans sponsored by companies in the S&P 1500 


Source: Mercer, November 2016 

See Figure 2 (below) for High Quality Corporate Bond Yield and S&P 500 data points.

Figure 2:


High Quality Corporate Bond Yield

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About Mercer

Mercer is a global consulting leader in talent, health, retirement and investments. Mercer helps clients around the world advance the health, wealth and performance of their most vital asset – their people. Mercer’s more than 20,000 employees are based in 43 countries and the firm operates in over 140 countries. Mercer is a wholly owned subsidiary of Marsh & McLennan Companies (NYSE: MMC), a global professional services firm offering clients advice and solutions in the areas of risk, strategy and people. With 60,000 employees worldwide and annual revenue exceeding $13 billion, Marsh & McLennan Companies is also the parent company of Marsh, a global leader in insurance broking and risk management; Guy Carpenter, a leader in providing risk and reinsurance intermediary services; and Oliver Wyman, a leader in management consulting. For more information, visit Follow Mercer on Twitter @Mercer

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[1]Figures provided by Mercer Investment Consulting, Inc.



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