S&P 500’s Biggest Pension Plans Face $382 Billion Funding Gap

By Brandon Kochkodin and Laurie Meisler

People who rely on their company pension plans to fund their retirement may be in for a shock: Of the 200 biggest defined-benefit plans in the S&P 500 based on assets, 186 aren’t fully funded. Simply put, they don’t have enough money to fund current and future retirees. The situation worsened for more than half of these funds from fiscal 2015 to 2016. A big part of the reason is the poor returns they got from their assets in the superlow interest-rate environment that followed the financial crisis. It’s left a hole of $382 billion for the top 200 plans.

Of course, the percentage of workers covered by traditional defined benefit plans—those that pay a lifetime annuity, often based on years of service and salary—has been declining for decades as companies shift to defined contribution plans such as 401(k)s. But each time a pension plan is terminated, canceled or altered, thousands of workers are affected.

Last month, the 70,000 participants in the United Parcel Service Inc. pension plan learned they won’t earn increased benefits if they work after 2022. Late last year DuPont Co. announced it would stop making payments into its pension plan for 13,000 active employees, and Yum! Brands Inc. offered some former employees a lump-sum buyout to offload some of its pension liabilities. General Electric Co. has a major problem. The company ended its defined benefit plan for new hires in 2012, but its primary plan, covering about 467,000 people, is one of the largest in the U.S. And at $31 billion, GE’s pension shortfall is the biggest in the S&P 500.

Companies With the Lowest Ratios of Pension Assets to Pension Obligations

Obligation

Assets

46.6%

49.4%

55.7%

58.1%

58.2%

59.4%

Intel

Delta

Airlines

Delphi

Automotive

American

Airlines

Anadarko

Petroleum

Procter &

Gamble

60.8%

62.2%

63.9%

64.3%

65.1%

66.0%

TE Connectivity

Parker-Hannifin

United

Continental

Holdings

Freeport-

McMoRan

FirstEnergy

Harris

66.4%

66.8%

67.0%

67.1%

67.1%

67.9%

Arconic

Sempra

Energy

General

Electric

Broadcom

DuPont

Rockwell

Collins

67.9%

68.2%

Lockheed

Martin

Becton

Dickinson

Obligation

Assets

46.6%

49.4%

55.7%

58.1%

Intel

Delta

Airlines

Delphi

Automotive

American

Airlines

58.2%

59.4%

60.8%

62.2%

Anadarko

Petroleum

Procter &

Gamble

TE Connectivity

Parker-Hannifin

63.9%

64.3%

65.1%

66.0%

United

Continental

Holdings

Freeport-

McMoRan

FirstEnergy

Harris

66.4%

66.8%

67.0%

67.1%

Arconic

Sempra

Energy

General

Electric

Broadcom

67.1%

67.9%

67.9%

68.2%

DuPont

Rockwell

Collins

Lockheed

Martin

Becton

Dickinson

Obligation

Assets

46.6%

49.4%

55.7%

Intel

Delta

Airlines

Delphi

Automotive

58.1%

58.2%

59.4%

American

Airlines

Anadarko

Petroleum

Procter &

Gamble

60.8%

62.2%

63.9%

TE Connectivity

Parker-Hannifin

United

Continental

Holdings

64.3%

65.1%

66.0%

Freeport-

McMoRan

FirstEnergy

Harris

66.4%

66.8%

67.0%

Arconic

Sempra

Energy

General

Electric

67.1%

67.1%

67.9%

Broadcom

DuPont

Rockwell

Collins

67.9%

68.2%

Lockheed

Martin

Becton

Dickinson

The S&P’s Most Underfunded Pension Plans