Rising U.S. bond yields offer relief to corporate America’s pension plans
The swift rise in U.S. bond yields in February may be whipsawing some stock market portfolios but it may bring relief to corporate America’s largest pension plans.
For pension funds, rising interest rates can generate more investment income to cover their obligations to pay pensioners.
The prolonged low-rate, low-volatility environment since the 2008 financial crisis posed a challenge for pension fund managers. Not only were returns on bonds low, but the market value of their liabilities was rising, reducing the so-called funding ratio of pension funds.
Read More: Reuters
