While the pension deficit for the Fortune 1000 plans Willis Towers Watson tracks is projected to be only slightly lower than the deficit at the end of 2017, pension plan assets declined sharply at the end of 2018.
Tag: DB plan funding
There are goals and deadlines during the termination process, so a plan sponsor doesn’t want to hit a roadblock and have to start the process all over again.
Entities that monitor defined benefit (DB) plan funded status noted that the decline could have been worse had interest rates not increased and pushed down plans’ liabilities.
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.
A newly filed challenge to St. Joseph Health Services of Rhode Island’s retirement plan claims the plan at some point failed to be a church plan, and entities administering or associated with the plan hid this to keep from adhering to funding rules as defined by ERISA.
Nearly two-thirds (62%) of respondents to a survey say they are "very likely" to transfer some or all of their pension obligations to an insurance company once their DB plan becomes well-funded.
The complaint alleges that at a certain point, the plan lost its church plan status as defined by ERISA and was required to adhere to ERISA funding rules.
A partner at Ivins, Phillips & Barker discusses why defined benefit plan sponsors should consider accelerating their funding—and how to do so.
Although increasing pension contributions was not a primary consideration in the decision to lower the corporate tax rate in the Tax Cuts and Jobs Act, it is a positive unintended consequence.
Firms that track defined benefit (DB) plan funded ratios also noted that slight gains in equity markets improved plans’ funded status during the month.
“A primary driver of the improvement in the funding ratio was the increase in global equity values for the 12-month period ending June 30, 2017,” notes Ned McGuire, managing director and a member of the Pension Risk Solutions Group of Wilshire Consulting.
“A combination of economic, demographic, and regulatory changes have placed a small but material segment of these plans at risk,” Ted Goldman, senior pension fellow with the American Academy of Actuaries, told a new Congressional committee.
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.
While January was a great month for defined benefit (DB) plan funded status, recent market volatility underscores how important risk management is, says Matt McDaniel, with Mercer.
Michael A. Moran, with GSAM, says the firm expects voluntary contribution activity to continue into 2018, as defined benefit plan sponsors claim a deduction at their former, higher tax rate.
Public pension fund members surveyed expressed interest in more transparency about pension fund investments and investment returns.
The updated mortality improvement rates and static tables apply for purposes of calculating the funding target and other items for valuation dates occurring during calendar year 2019.
Firms that track DB plan funding reported increases in the month ranging from 0.4% to 1.0%.