The combined deficit of the pension plans run by US companies listed on the S&P 1500 index has fallen by $185bn since the turn of the year, according to figures published by Mercer today.
The consultancy's data shows that, at the end of March, the aggregate deficit of the plans stood at $372bn, compared to the deficit of $557bn at the end of December, which was a record for the year end.
Last month in particular saw a major improvement in pension plan funding, with deficits improving by $107bn. Plans' funded ratio - the value of their assets divided by the value of their liabilities - ended March at 82%, compared to 77% at the end of February and 74% at the end of 2012.
Mercer explained that March's improvement was driven by gains of 3.75% on the value of equities on the S&P index, while the high quality corporate bond rates which affect liabilities increased slightly. In total, plan assets were worth an estimated $1.68 trillion, while liabilities were worth an estimated $2.05trn.
Assets also grew because of contributions, with S&P 1500 plan sponsors contributing over $80bn to their plans over the course of 2012. This was $20bn more than they had expected at this time last year despite the enactment of the Moving Ahead for Progress in the 21st Century Act, or MAP-21, which enabled sponsors to lower their contributions to pension plans.
Jonathan Barry, a partner in Mercer's retirement business, said: 'Certainly the funded status improvement we saw in the first quarter is a great outcome for most plan sponsors
'However, there is still some heavy lifting for plan sponsors to do to get to a fully funded position. Also, we saw a similar pattern in 2011 and 2012, where funded status improved significantly in the first quarter, only to see those gains reverse themselves as the year went on.'
Richard McEvoy, a partner in the consultancy's investment business, added: 'We saw many glide path clients that measure funded status daily execute de-risking triggers in the first quarter. These nimble changes to lower risk positions highlight the benefit of having a pre-agreed plan with a supporting execution process in place.'