February 2024
22Feb

U.K. defined benefit universe continues to shrink – Pensions Regulator

The U.K.'s defined benefit and hybrid universe continues to shrink at a consistent rate, down 2% to 5,297 plans in 2023, while almost three-quarters of plans are now in surplus, according to The Pensions Regulator. Statistics show 73% of all DB pension plans are estimated to be in surplus on a funding basis, compared with just 50% the year before. The total deficit has also more than halved, reducing to £27.7 billion ($35.3 billion) from £63.6 billion. The percentage of DB...

February 22, 2024
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08Feb

US. Shell Closes $4.9B Pension Risk Transfer With Prudential

Prudential Financial Inc. announced on Wednesday it had closed a $4.9 billion pension risk transfer deal with Shell USA Inc. The transaction would be the first major pension risk transfer in the U.S. this year, following record years for the pension risk transfer market in 2022 and 2023.  “Prudential is honored to help continue meeting the retirement security needs of Shell’s retirees,” said Alexandra Hyten, head of institutional retirement strategies at Prudential, in a statement. “We are confident that our commitment...

February 8, 2024
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January 2024
24Jan

The Ins and Outs of Final Salary Pensions

How do you envision your golden years? For many, it means traveling or just relaxing on sun-kissed beaches, free of the daily grind. Financial security, however, is crucial to a truly idyllic retirement. The golden ticket to that blissful state used to be a final salary pension, but unfortunately, it no longer exists. Today, the pension landscape has radically changed. In place of final salary plans, defined contribution plans like 401(k)s have become more common. As of November 2023, 22% of non-retirees...

January 24, 2024
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09Jan

3M to freeze U.S. pension plans

3M Co., St. Paul, Minn., will freeze its U.S. pension plans for nonunion employees at the end of 2028. The company said pension-eligible nonunion employees will accrue benefits until Dec. 31, 2028, according to a Jan. 8 news release. 3M had closed its primary U.S. pension plan to new hires effective Jan. 1, 2009. The change will affect employees at both 3M and Solventum, the healthcare company that is expected to spin off from 3M in the first half of 2024. "This...

January 9, 2024
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December 2023
15Dec

The Shift that Redefined Retirement Security

By Shashwat Vidhu Sher Retirement plans have been a standard feature of public and private sector employers in the United States since the early 1900s. Although Defined Benefit plans were the mainstay of most pensions plans for much of the twentieth century, there was a massive shift in the 1980s, mainly in the private sector, towards Defined Contribution plans like 401(k). The paper argues that government policies for the private sector, new employer-employee relationship, job-switching, and familiarity with the financial...

December 15, 2023
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13Dec

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...

December 13, 2023
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07Dec

Could the retirement pension be making a comeback?

Why news from IBM and talk of 'lifetime income' may lead to alternatives to traditional 401(k)s Remember the "three-legged stool?" That phrase was used for decades to describe Americans' chief sources of retirement income: Social Security, private pensions and personal savings. But in the 1990s and early 2000s, employers started freezing or eliminating defined-benefit pensions they funded and replacing them with 401(k) retirement plans requiring employee contributions. As a result, the stool got wobbly. Today, just 15% of private employers offer...

December 7, 2023
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07Dec

PPF Purple Book shows improved U.K. funding levels

U.K. defined benefit plans covered by the Pension Protection Fund saw "significant improvement" in funding levels that could bring more buyouts, according to the lifeboat fund's 2023 report published Dec. 6. The PPF's annual Pensions Universe Risk Profile, known as the Purple Book, showed a surplus of £358.9 billion ($443.3 billion) in the fiscal year ending March 31, with 80% of pension funds in surplus. That was up from surpluses of £193 billion in 2022 and £47 billion in 2021, according...

December 7, 2023
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November 2023
29Nov

UK. Hopes and fears for pensions in 2024

Aon has set out its “hopes and fears” for pensions in 2024. After a year in which UK pension schemes digested the events of 2022 and adjusted themselves to new circumstances, Matthew Arends, partner and head of UK retirement policy at Aon, looks at what the pension industry may have on its mind as it goes into 2024. “All those involved in running pension schemes may have mixed feelings as they face the New Year" There have been improvements in...

November 29, 2023
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28Nov

IBM unveils details of retirement benefit account

International Business Machines has provided details to employees of the company's scrapping its 401(k) corporate match and replacing it with a cash balance component called a retirement benefit account, which is part of the IBM Personal Pension Plan, a defined benefit plan. The company confirmed earlier this month that the RBA would replace the 5% match for the 401(k) plan on Jan. 1, but didn't discuss details. The IBM Personal Pension Plan — closed to new participants since 2005 and frozen...

November 28, 2023
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