A study by the CRR finds that state and local pension funding is expected to improve in 2017 due to strong market returns, but a new
approach to providing adequate contributions is needed to make the most out any recovery.
Most companies used a single weighted average discount rate to measure the interest cost and service cost components of benefit cost, but PwC found, beginning in 2015, many companies adopted a multiple discount rate approach.
State Treasurer Nancy K. Kopp says, “Recognizing that both the inflation experience and expectations for future inflation remain lower than the rate currently assumed, the Board felt it reasonable to reduce the expected return accordingly.”
The proposed Implementation Guide provides answers to questions intended to clarify, explain, or elaborate on the requirements of GASB Statement No. 75, and addresses a limited number of issues related to Statement No. 74.
Among DB plan participants who were given a choice between a lump sum or an annuity, fewer than half said that, at the time they made their decision, they recall being presented with information comparing the total amount of the lump sum versus the total value of the annuity payments.
Many of the largest pension plans in the U.S. are lowering assumed long-term rates of return in light of global economic headwinds, which further contributes to declining funded ratios and puts a strain on cities' credit ratings.