DB Funded Status Continues to Improve

According to a review of the top 100 defined benefit (DB) plans by Pensions & Investments Magazine, the funded status of those plans improved from 80.6% in 2012 to 93.5% in 2013, almost the same level as in 2005. In 2007, the funded status had reached as high as 108.6%, then plummeted the following year to 79.1% during the economic downturn. The combined funding deficit of the top 100 plans declined from $302 billion to $122 billion. The improvement was attributed primarily to gains in the equity market. An impressive 97 plans improved their funded status in 2013, with 24 plans having a funding surplus. Interestingly, despite the purported decline in DB plans, assets have grown from $2 trillion to $3 trillion in private DB plans since 2008, according to the Investment Company Institute (ICI).