Firms that track defined benefit (DB) plan funded ratios also noted that slight gains in equity markets improved plans’ funded status during the month.
Tag: DB plan funding
“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%.
No lever alone is enough to close the pension funding gap, according to a report from Cambridge Associates.
New research shows that funding status has little correlation with a pension fund’s ability to pay its promised benefits, and NCPERS urges policymakers to stop trying to shut down public pensions.
Those tracking S&P plans estimate a slight decrease in or flat pension funding ratio, while other estimate a slight increase. Most agree funding is up for the year.
According to a Sears announcement, following the making of a $407 million contribution, it will be nearly relieved of the obligation to make further contributions to the pension plans for approximately two years.
“Companies feel that the time is right to reduce or eliminate their pension funding shortfalls.” says Matt McDaniel, partner, Mercer.
Asset management firms estimate pension funding ratios declined slightly in August, but most say they are up for the year.