January 2024

UK. DWP confirms final DB funding regulations

The Department for Work and Pensions (DWP) has published the final Occupational Pension Schemes (Funding and Investment Strategy and Amendment) Regulations 2024, which are set to come into force from April 2024. The final regulations set out the requirements for defined benefit (DB) pension schemes when determining their funding and investment strategy and statement of strategy, and will apply to scheme valuations from September 2024. Industry experts previously raised concerns over a potential mismatch between the DB regulations and The Pensions...

Public Pension Funding Index January 2024

By Rebecca A. Sielman & Richard L. Gordon  Two consecutive months of positive market performance in November and December 2023 pushed the funded status of the 100 largest U.S. public pension plans to its highest point of 2023. The plans’ estimated funded status increased from 72.4% as of October 31, 2023, to 75.9% as of November 30, 2023, and further increased to 78.2% as of December 31, 2023, as measured by the Milliman 100 Public Pension Funding Index (PPFI). Get the...

Funding ratio of largest U.S. public pension plans hits 78.2% at year-end – Milliman

The overall estimated funding ratio of the 100 largest U.S. public pension plans reached 78.2% at the end of December, the highest level of 2023, according to the Milliman 100 Public Pension Funding index. After three straight months of declines due to negative market returns in August through October, the estimated ratio rose for the second straight month in December. As of Nov. 30, the estimated ratio has risen to 75.9% from 72.4% at the end of October. The late-year rally...

PPF 7800 Index

By Pension Protection Fund The PPF 7800 Index tracks the level of underfunding risk in the PPF-eligible universe using the latest scheme return information provided to The Pensions Regulator and the roll- forward methodology used for PPF levy purposes. There are certain simplifications within the levy calculation, as described in note 4 on page 7 of this document, that should be borne in mind when interpreting these results. In particular, the assets and liabilities have not been reduced for benefit...

Pension Funding Index January 2024

By Zorast Wadia The funded status of the country’s 100 largest corporate pension plans, as measured by the Milliman 100 Pension Funding Index (PFI), experienced a modest improvement in 2023, driven by annual investment returns of 9.94%. Declining discount rates, particularly in the fourth quarter, and the corresponding liability (i.e., the projected benefit obligation) increase of 8.33% served to partially offset the asset gains, resulting in a funded status improvement of $4 billion for the year. This gain paled in...

US Corporate Pension Plans Ended 2023 at Record Funding Levels

The funded status of the largest U.S. corporate pension funds hit an all-time high at the end of 2023, with many trackers finding U.S. plans fully funded. In December, pension trackers shared mixed results on funded status increases in corporate defined benefit plans, but most trended upward. WTW According to analysis by WTW, funded status for the largest U.S. corporate pension plans will end 2023 at 100%. WTW’s tracker, which tracks 358 Fortune 500 companies that sponsor U.S. defined benefits plans,...

The State of Pensions 2023: Year End Update

By Anthony Randazzo & Jonathan Moddy  In 2023, U.S. public pension funds remain fragile. According to Equable Institute’sState of Pensions 2023 report, state and municipal retirement systems are on track to miss their investment targets and are unlikely to see meaningful improvements in their unfunded liabilities or funded ratio in 2023. In this post, we will look at pension funding trends and detail the health of pension funds in an increasingly unpredictable market and where risky investments are more popular than ever....

US. Pension Plans in ’23: Glass Half Full—and Half Empty

“Best condition this century.” Or, “improved” but “fragile.” Both characterizations of the state of pensions in 2023. Which applies depends on which pension system one is talking about. Better, But… State and local pension plans saw improvement in 2023, but there is still plenty of room for more, according to Anthony Randazzo and Jonathan Moody in Equable’s research brief “The State of Pensions 2023,” which looks at how public pensions fared in the year that was. Randazzo and Moody write that the...

US. Largest U.S. corporate pension plans’ funding ratio hits 100% – WTW

The largest U.S. corporate pension plans' aggregate funding ratio reached 100% at the end of 2023, according to a new estimate from Willis Towers Watson. The analysis of pension plan data of 358 Fortune 1000 companies with defined benefit plans estimates the ratio increased from 98% at the end of 2022. WTW's estimated pension plan assets totaled $1.19 trillion as of Dec. 31, a decline of 1% from the previous year due to an active year in pension risk transfer transactions...

December 2023

US. Study finds healthier funding status for DB plans raising interest in LDI strategy reviews

U.S.-based defined benefit pension plan sponsors are increasingly looking to assess their liability-driven investment strategies as they reach fully funded statuses, according to a new study by Coalition Greenwich and commissioned by Franklin Templeton. The study found nearly three-quarters (73 per cent) of pension plan sponsors reported funding ratios of 100 per cent or higher, while the rest had funding ratios above 110 per cent. Roughly half of respondents said they’re concerned about “substantial overlap in holdings” among their LDI...