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Milliman 100 Pension Plans Lose $9 Billion in September

Posted on: Friday, 10 October 2008, 15:00 CDT

SEATTLE, Oct. 10 /PRNewswire/ -- Milliman, Inc., one of the premier global consulting and actuarial firms, today released the first of what will be a monthly update to the Milliman 100 Pension Funding Index. During the financially volatile month of September, the assets of the Milliman 100, which includes the 100 largest corporate defined benefit pension plans, dropped by more than $78 billion in value. These losses were offset by interest rate gains, resulting in a net loss of $9 billion for the month (increasing the net loss for the year to $79 billion) and an overall funded ratio of 98.4% on September 30, down from 104.9% at the beginning of 2008.

"It should come as no surprise that pensions suffered during the sharp market downturn in September," said John Ehrhardt, co-author of the Milliman 100 Pension Funding Index. "Fortunately these losses were offset by gains in interest rates. We cannot predict where the market will close at the end of October, though Wednesday's worldwide reduction in interest rates seems to indicate that we may not have such an offset in October."

While the September results are the most dramatic of the year, they mirror the year-to-date trend. The Milliman 100 pensions opened the year with a healthy funding position of 104.9%, only to see the funding surplus erode during the first quarter. The cumulative asset return for the past 12 months stands at -12.11%, a loss of $102 billion. Looking forward, the combination of a 0% return for the rest of the year and steady discount rates (7.63%) would result in a $22 billion funding loss and a funded ratio of 96.4% on December 31.

To view the complete monthly update, go to http://www.milliman.com/expertise/employee-benefits/products-tools/pension-funding-st udy/index.php

About Milliman

Milliman is among the world's largest independent actuarial and consulting firms. Founded in Seattle in 1947 as Milliman & Robertson, the company currently has 48 offices in key locations worldwide. Milliman employs more than two thousand people, with a professional staff of more than a thousand qualified consultants and actuaries, including specialists ranging from clinicians to economists. The firm has consulting practices in healthcare, employee benefits, property and casualty insurance, life insurance, and financial services. Milliman serves the full spectrum of business, financial, government, union, education, and nonprofit organizations. For further information, visit http://www.milliman.com/.

About the Milliman 100 Pension Funding Index

For the past eight years, Milliman has conducted an annual study of the 100 largest defined benefit pension plans sponsored by U.S. public companies. The Milliman 100 Pension Funding Index projects the funded status for pension plans included in our study, reflecting the impact of market returns and interest-rate changes on pension funded status, utilizing the actual reported asset values, liabilities, and asset allocations of the companies' pension plans.

The results of the 2008 Milliman 100 Pension Funding Index were based on the actual pension plan accounting information disclosed in the footnotes to the companies' annual reports for the 2007 fiscal year and for previous fiscal years. In addition to providing the financial information on the funded status of U.S. qualified pension plans, the footnotes may also include figures for the companies' nonqualified and foreign plans, both of which are often unfunded or subject to funding standards different from those for U.S. qualified pension plans. They do not represent the funded status of the companies' U.S. qualified pension plans under ERISA.

Milliman, Inc.

CONTACT: John Ehrhardt of Milliman, Inc., +1-646-473-3300,john.ehrhardt@milliman.com

Web Site: http://www.milliman.com/http://www.milliman.com/expertise/employee-benefits/products-tools/pension-funding-study/index.php

Source: PRNewswire

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