Gotcha. It read like all the slowing down makes sense because of wage gains.

Pension liabilities aren't necessarily connected to the health of a company. ERISA funding rules are very complex, and yes, often times the economic forces that drive a pension into an underfunded status are the same one's driving a company to underperform, maybe into bankruptcy. However, there may be reasons a company is failing outside economic forces, so it's entrely possible that a pension is fully funded desipte the fiscal condition of the sponsor. Today, for instance, market returns are good, and interest rates are relatively high. Good market returns help the fund itself to perform well, and high interest rates reduce future liabilities because of the way the funding model works (only long term interest rates are permitted for modeling future fund performance). You could have a pension that is well overfunded in that situation.

In fact, with moderate market returns and historically average interest rates, mature pensions become self-funding, and little or no contributions are required. One of the supreme ironies of the late 90s is practically all airline pensions were well funded, some well over 100%. Some groups recognized that there were combinations that could lead to a rapid reversal, and sought to diversify their pension plants to include more DC money. Managements refused because DC money costs real money every 2 weeks, and the DB plans at the time cost nothing under most conditions.

If you have an economic upset, you wind up with the combination of fund losses and that can be coupled with a rapid drop in interest rates. Fund losses are self-explanitory, but the sudden drop in interest rates causes a big jump in liabilities of the plan. Remember, future returns of the plan can only use long term interest rates, so when you have very low interest rates, compounded over an actuarial average of 30 years, and that is a catestrophic expense. ERISA, at least at the time, didn't allow for any time for market recovery, so the funding due into the plans became due instantly, right at the time most outfits could ill afford it.