Courtesy of Russ Winter of Winter Watch at Wall Street Examiner
The pension funds are even more underfunded and damaged from ZIRP. Aggravating this further is that pension funds have plowed right into the bond bubble by increasing exposure. .
S&P: The U.S. equity market, as measured by the S&P 500, showed flat performance in 2011. Combined with the S&P Global BMI non-U.S.decline of 16.6% and lower interest rates, this flat market has significantly reduced S&P 500 pension funding, resulting in record liabilities and record underfunding. Year-over-year comparisons from 2010 to 2011 indicate:
-Pension underfunding increased to USD 355 billion from USD245 billion.
-The pension funding rate decreased to 78.8% from 83.9%.
-The expected return rate declined to 7.60% from 7.73%.
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