Defined-benefit pension plans sponsored by Standard & Poor’s 500 companies were, on average, no better or worse off at the end of 2004 than they were a year earlier, according to a new study by S&P.

At the end of 2004, the 369 S&P 500 companies that offer defined-benefit plans were underfunded by a total of $164 billion, an uptick from the $165 billion reported for 2003. Standard & Poor’s expects market returns to be below average and interest rates to rise only modestly, so “funding should improve slightly, but still remain underfunded in the $140 to $150 billion range,” according to index committee chairman David Blitzer. “The major factor affecting pension underfunding in 2005 will be interest rates, and we expect them to increase, but not sufficiently enough to alleviate the funding shortage.”

Last year pension assets grew 13.6 percent while obligations climbed 11.8 percent; 55 of the plans were overfunded, 311 underfunded.

This is roughly the opposite of 1999, the last full year of a stock-market boom, when 296 plans were overfunded and 86 underfunded, to the tune of a $280 billion surplus.

Despite the apparent reversal of pension fortunes, however, S&P analyst Howard Silverblatt stated: “In spite of the continued underfunding, companies on aggregate have sufficient proceeds, both on hand and via the capital markets, to meet current pension obligations. The current situation is an investor concern as they need to assess what the obligations of a company are, where the required funds will come from, and how any shift in expenditures will affect future growth.”

Indeed, the situation today is much improved from 2002, at the height of the stock market sell-off, when 321 plans were underfunded and just 36 were overfunded, according to S&P.