$20 billion club experiences sharp increase in pension assets and liabilities in 2010
Analysis draws five big conclusions from the 2010 reporting cycle
Seattle, WA — March 1, 2011 — Assets and liabilities grew dramatically in 2010 for the sixteen publicly listed U.S. corporations with pension liabilities over $20 billion, according to newly published analysis conducted by Russell Investments.* These corporations – which the new report labels the "$20 billion club" – now have a combined $740 billion of pension liabilities on their balance sheets, up from $700 billion last year. The value of their assets rose from $578 billion to $619 billion over the same time in 2010.
"The $20 billion club represents close to forty percent of the total pension liability on all publicly listed U.S. corporate balance sheets. The scale of their investment activity can cause markets to rise or fall, and the demand for investment products from this group defines the product strategies for a large part of the financial services industry," said Bob Collie, chief research strategist, Russell Investments. "The fact that both sides of the pension balance sheet grew substantially in 2010 reminds us that corporate pension plans remain a major part of the financial ecosystem."
The combined pension shortfall of some $121 billion is likely to trigger substantial catch-up contributions in the next few years as a result of requirements built into the Pension Protection Act of 2006. The corporations contributed a combined $21 billion over the last year, a similar amount as in 2009, but more than double 2008.
"Twenty billion dollars is a lot of money no matter whose balance sheet it appears on. These corporations take pension risk very seriously, and they will continue to be among the leaders in pension de-risking and liability matching," said Collie.
Download a copy of the research "Sharp increase in both assets and liabilities for the pension world's $20 billion club."
* Corporate pension disclosures based on the corporations' financial years rather than calendar years.
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Through a unique combination of interlinked businesses, Russell delivers financial products, services and advice. A pioneer, Russell began its strategic pension fund consulting business in 1969 and today is trusted by many well-known worldwide institutions for investment advice. Headquartered in Seattle, Washington, USA and with offices in major financial centers worldwide, Russell has $155 billion in assets under management (as of 12/31/2010) in its mutual funds, retirement products, and institutional funds, and is well recognized for its depth of research and quality of manager selection.
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