2013 saw pension funding rebound

"The strong stock market and higher interest rates last year gave plan sponsors the one-two punch they needed to cut the funding deficit of their corporate pension plans by nearly 75 percent," says Alan Glickstein, a senior retirement consultant at Towers Watson. "As a result of the funded status improvement, funding ratios are now at their highest levels since the financial crisis of 2008, but still well below 100 percent, a level reached only three times since 2000. The improved funding environment, together with legislative funding stabilization enacted in 2012, gave plan sponsors some relief from record levels of contributions since the 2008 recession."

The Towers Watson analysis estimates that companies contributed $48.8 billion to their pension plans in 2013, 30 percent less than in 2012. Pension plan assets increased by an estimated 5 percent in 2013, from $1,288 billion at the end of 2012 to an estimated $1,409 billion at the end of last year.

"The improved funding environment will provide pension plan sponsors with some intriguing opportunities for 2014," says Dave Suchsland, a senior retirement consultant at Towers Watson. "We expect the actions we've seen among companies to de-risk their pension plans over the past several years will accelerate as funding levels continue to improve, especially in light of increases in PBGC premiums and mortality tables, and projection scales with increased life expectancy."