Defined benefit (DB) plan sponsors have enjoyed improved funded status so far this year. Some see this as a time to take action to de-risk their plans. However, if plans are overfunded, this could create challenges, and plan sponsors need to know what to do. As for compliance, DB plan sponsors are facing increased disclosure requirements in the near future, and they may have to provide more information in their reportable events filings if the Pension Benefit Guaranty Corporation (PBGC) gets its way. This edition of PLANSPONSOR Weekend focuses on information helpful to DB plan sponsors.
According to Goldman Sachs Asset Management’s new white paper, “Stars Aligning for Corporate Plans to Take De-Risking Actions,” almost 25% of U.S. corporate defined benefit (DB) plans are now in a fully funded or over-funded position. As the paper’s title indicates, this means many plan sponsors are in a great position to take further de-risking actions.Read more >
An article by Brian Donohue, partner at October Three Consulting, discusses how a funding surplus can pose a challenge to DB plan sponsors’ risk transfer or plan termination actions and what they can do to mitigate this problem.Read more >
The PBGC is proposing in a renewal request that all reportable events filings include controlled group information, company financial statements, and the plan’s actuarial valuation report.Read more >
The Society of Actuaries (SOA) has updated its annual mortality improvement scale for pension plans through the publication of “MP-2018,” finding a decline in future rates of mortality improvement and lower pension plan obligations compared with its 2017 scale.Read more >
Some firms that track pension funded status point out that plan sponsors should prepare for changes in the future as a market correction is expected and funding relief fades and higher plan sponsor contributions will be required.Read more >
