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Investing October 7, 2003
Ryan: Liability Gap Spikes in September
October 7, 2003 (PLANSPONSOR.com) - A rally in
interest rates led to one of the highest monthly growth rates
for both the bond market and pension liabilities, as the
pension asset/liability gap widened even more in
September.
Reported by Eric Hazard
The liability increase of 0.7% moved the year-to-date returns to 3.28%. This helped spur a massive movement in the 2003 asset/liability ratio, which now stands at 7.68% year-to-date from 13.57% last month (See Ryan: Liabilities Widen August’s Funding Gap ), according to data from Ryan Labs.
Since December 1999, the asset-to-liability growth rate difference (pension deficit) is now -60.15%, suggesting funding ratios below 60% for most pensions. Ryan’s data is based on roughly $200 billion in assets tracked in its Custom Liability Index system.