Newsdash Insight on Plan Design & Investment Strategy from PLANSPONSOR
December 15th, 2015
Benefits & Administration
Study Quantifies Occurrence of Pension Risk Transfer
A Pension Benefit Guaranty Corporation (PBGC) study of defined benefit (DB) plans with more than 1,000 participants found 534 had some kind of risk transfer activity in the years 2009 to 2013. This number includes 145 cash balance plans, 135 collectively bargained plans, and 399 other DB plans. Fifty of those 534 plans went through a standard termination—which the researchers call the “ultimate form of risk transfer.” More than one million participants left the plans as a result of the events.Read more >
Discussing the preliminary results of an analysis of Governor Dannel Malloy’s proposals for funding Connecticut’s largest pension plans, State Treasurer Denise L. Nappier supported reform that would phase in a reduction of the investment return assumption, from 8% to 7%, in order to conform more realistically to expectations for how capital markets will perform going forward. However, Nappier made clear that whatever investment return assumption is used, there is “no investment strategy that would, in and of itself, allow us to earn our way out from under these unfunded liabilities.”Read more >