Goldman Sachs Sees Stars Aligning for Pension PRT
Clients with defined benefit plans that are currently enjoying a bump in funded status may want to act soon to lock in those gains while market conditions remain favorable.
According to Goldman Sachs Asset Management’s new white paper, “Stars Aligning for Corporate Plans to Take De-Risking Actions,” almost 25% of U.S. corporate defined benefit (DB) plans are now in a fully funded or over-funded position.
As the paper’s title indicates, this means many plan sponsors are in a great position to take further de-risking actions.
“Our work would indicate that the aggregate system-wide funded level hit 91% at the end of September, the highest level since the financial crisis,” the paper says. “This represents a five percentage point improvement in funded status year-to-date and a 10 percentage point increase since the end of 2016.”
The paper says all of this is occurring when the S&P 500 has offered strong returns during the first three-quarters of 2018 and is still close to its all-time high, despite some rocky days in the second week of October.
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