The funded status of the nation’s largest corporate pension plans declined in 2012 as falling interest rates, which increased liabilities, offset both strong stock market returns and significant employer contributions, according to a new analysis by Towers Watson. In the first look at estimated year-end pension plan results, Towers Watson finds that 2012 funding levels declined for the second consecutive year and remained well below healthy levels.

The analysis examined pension plan data for the 429 Fortune 1000 companies that sponsor U.S. defined benefit pension plans and have a Dec. 31 measurement date. Results indicate that the aggregate pension funded status is estimated to be 75% at the end of 2012, compared to 78% at the end of 2011. Overall, pension plan funding decreased by $79 billion last year, leaving a deficit of $418 billion at the end of 2012.

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