Defined benefit pension plans saw asset decreases of $41 billion and liability increases of $14 billion in May, the steepest decline in pension funding status in almost a year, Milliman Inc., Seattle, reports.

The Milliman 100 Pension Funding Index, which consists of 100 of the nation’s biggest defined-benefit pension plans, saw a similar decline in overall funded status in June of 2009, but that was mostly a result of liability increases, says Milliman, an actuarial and consulting firm.

“Last month’s precipitous decline was the result of steep asset losses and further liability increases, making it the worst month for pension funded status since the dire days of late 2008,” said John Ehrhardt, coauthor of the index.

The pension funding deficit rose to $294 billion at the end of May, Milliman reports. In view of current interest rates averaging 5.61%, DB pensions would need investment gains of over 34% for the rest of 2010 to reach a 90% funded ratio–and that would still leave the deficit at $138 billion, according to Milliman.