The latest report from Russell Investments shows the largest defined benefit (DB) plan sponsors have shifted more to fixed income investments and increased contributions as they continue to de-risk.
Tag: DB plan contributions
“Tax reform has allowed plan sponsors to take advantage of a higher deduction. Doing so may mitigate the need for higher contributions in the future,” says Alexa Nerdrum, managing director, retirement at Willis Towers Watson.
The company is offering a lump-sum window, transferring some liabilities to a group annuity, making a contribution to its pension plan and transitioning to a liability-matching investment allocation.
A federal appellate court agreed with the Commissioner of Internal Revenue that Pizza Pro Equipment Leasing incorrectly calculated the limitation on the plan’s annual benefit and therefore made non-deductible contributions to the plan.
When computing defined benefit (DB) plan liabilities for 2015 using unsmoothed corporate bond rates to discount liabilities, roughly 84% of plans had unfunded liabilities, versus 11% for plans using the smoothed bond rates, the Society of Actuaries found.