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Falling interest rates and volatile stock markets are putting pressure on pension fund returns.
UBS's Janet Pegg warns that lower expected returns will eventually lead to higher pension expenses as companies try to improve the deteriorating funded status of their plans.
Pegg's report identifies the 25 most underfunded pension plans, based on a percentage of market cap. We've pulled the 10 worst.
Note: These figures are based fiscal years ending between December 2010 and March 2011.
#10: Raytheon Co. (NYSE: RTN)
ASU.edu
Under Funding as a % of Market Cap: -28.28%
2010 Projected Benefit Obligation: $19.138 billion
Total Amount Under Funded: $4.039 billion
#9: Sears Holdings Corp. (NASDAQ: SHLD)
Under Funding as a % of Market Cap: -29.13%
2010 Projected Benefit Obligation: $7.024 billion
Total Amount Under Funded: $1.682 billion
#8: Ford Motor Co. (NYSE: F)
Under Funding as a % of Market Cap: -29.91%
2010 Projected Benefit Obligation: $70.032 billion
Total Amount Under Funded: $11.457 billion
#7: Whirlpool Corp. (NYSE: WHR)
AP
Under Funding as a % of Market Cap: -38.59%
2010 Projected Benefit Obligation: $3.994 billion
Total Amount Under Funded: $1.534 billion
#6: SUPERVALU Inc. (NYSE: SVU)
Supervalu
Under Funding as a % of Market Cap: -42.07%
2010 Projected Benefit Obligation: $2.515 billion
Total Amount Under Funded: $619 million
#5: Lockheed Martin Corp. (NYSE: LMT)
Lockheed Martin's F-35 Lightning II multi-role fighter
Lockheed Martin
Under Funding as a % of Market Cap: -42.42%
2010 Projected Benefit Obligation: $35.773 billion
Total Amount Under Funded: $10.428 billion
#4: United States Steel Corp. (NYSE: X)
United States Steel Corp.
Under Funding as a % of Market Cap: -58.92%
2010 Projected Benefit Obligation: $10.630 billion
Total Amount Under Funded: $1.975 billion
#3: Owens-Illinois Inc. (NYSE: OI)
AP Photo
Under Funding as a % of Market Cap: -102.32%
2010 Projected Benefit Obligation: $4.004 billion
Total Amount Under Funded: $2.725 billion
#2: Goodyear Tire & Rubber Co. (NYSE: GT)
Under Funding as a % of Market Cap: -102.82%
2010 Projected Benefit Obligation: $8.337 billion
Total Amount Under Funded: $2.549 billion
#1: AK Steel Holding Corp. (NYSE: AKS)
AP Photo
Under Funding as a % of Market Cap: -136.65%
2010 Projected Benefit Obligation: $3.529 billion
Total Amount Under Funded: $1.056 billion
14 Biggest Layoffs of 2011
AP Photos/Paul Sakuma
Companies will have to cut pension benefits or see massive rebounds in the market to recoup losses.
Other firms have turned to layoffs to cut costs.
