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2010 Pension Funding Levels Improve, But Still Weigh On Corporate Credit Metrics Jul 11
Standard & Poors, July 2011
Abstract
Pension funding status improved modestly in 2010 for Standard & Poor's Ratings Services' rated U.S. nonfinancial corporate issuers. This occurred despite a rise in pension obligations stemming from declines in the discount rates that determine the present value of those obligations, as plan assets increased at a greater rate, in part due to a second consecutive year of substantial market gains. Plan assets also significantly increased due to higher employer cash contributions, especially for companies most in need of raising their funding levels to the escalating targets established by the funding requirements of the Pension Protection Act of 2006 (PPA). Plan asset investment allocations did not change considerably in 2010 from the prior year. Also, increased new borrowings by some...
Standard and Poors RatingsXpress Credit Research provides in-depth coverage of international corporates, financial institutions, insurance companies, utilities, sovereigns and structured finance programs. RatingsXpress Credit Research lets users determine the credit rating of holdings and identify key factors underlying an issuer's creditworthiness, distinguishes the different risk exposures for new and existing deals, and provides an understanding of how their analysts interpret key regulatory, political and environmental events and their economic impact.
Research Type: Commentary
Criteria articles describe the thought process and methodology Standard & Poor's analysts use in determining ratings. These commentary pieces discuss both the quantitative (economic and financial) and qualitative (business analysis and caliber of management) aspects of the analysis, as well as legal issues.
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