US. Nearly 1 in 5 Pension Plans Are Overfunded
Nineteen percent of defined benefit plan sponsors in a survey released Tuesday by investment consulting firm NEPC reported funded status of more than 101%, up from 9% a year ago. NEPC noted that this was the highest funded status since it inaugurated the survey in 2011.
Of the overfunded plans, 65% invest in alternatives, and 55% use liability-driven investment strategies, with a majority of users executing with derivatives.
The rising of variable rate premiums, implemented by the Pension Benefit Guaranty Corp., also had a strong effect on the improved funded status, according to NEPC. In its 2016 survey, a quarter of plan sponsors said they were considering additional contributions.
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