Pension Liabilities Outpace Assets

( - Despite a promising fourth quarter, the year opened poorly for pension plans, with liabilities increasing by 1.59% in January, while assets decreased by 0.87%, according to data from Ryan Labs.

Assets declined on the back of January’s weak equity market performance. Over the month:

  • the S&P 500 fell by 1.46%
  • the MSCI EAFE was down by 5.31%.

According to Ryan Labs, the growth in liabilities may be partly attributed to the Treasury’s decision to stop issuing the long bond – a decision that saw yields falling on supply concerns.

“Pension funds will be reviewing their asset allocation much more closely now as earning are affected and contribution holidays are placed on hold. Rebalancings will shift more towards limiting the downside of deficits or protecting surpluses,” according to Ryan Labs.”