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...
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...
In an economy characterized by a volatile stock market and elevated inflation, a sure thing looks better than ever. For some Americans in the labor force right now, that looks like a pension. Striking members of the United Automobile Workers union made waves this year when the union’s leaders demanded the reopening of defined-benefit pension plans for workers hired after late 2007. Although U.A.W. leadership failed to persuade automakers to reopen the plans, the bold move didn’t go unnoticed by...
The aggregate funding position of FTSE 350 companies’ defined benefit (DB) has undergone a "complete reversal" over the past 18 months, Mercer's latest Pensions Risk Survey data has found. The tracker showed that the aggregate funding of FTSE 350 companies' DB schemes stood at £68bn at October 2023, recovering from roughly the same level of deficit (£69bn) at the end of Q1 2022. Mercer also suggested that changes in DB schemes’ funding position could be set to play a more positive role...
Defined benefit (DB) pension surpluses remained broadly stable during October, registering a slight decrease, but remaining elevated compared with recent years, according to XPS Pensions Group’s latest DB:UK funding tracker. The consultancy's tracker tool estimated that the aggregate surplus of UK pension schemes, when measured on a long-term target technical provision basis, stood at about £184bn on 31 October, which translates into an aggregate funding level of 115 per cent. A moderate 0.1 per cent rise in long-term gilt yields led...
The United Auto Workers had an overarching goal last summer as it headed into negotiations with Detroit’s Big Three: claw back as many concessions as possible from the Great Recession, then keep pushing for an even better deal. In many ways it succeeded, with retirement being a notable exception. While the union won big improvements for savings plans, its long-shot endeavor to bring back pensions for younger members went nowhere, even as it won historic gains in pay and the elimination...
The United Auto Workers’ historic standoff with Detroit’s three carmaking giants is centered on an age-old tension: The union says corporate greed is keeping workers from earning fair wages, while Ford Motor Co., General Motors Co. and Stellantis NV say they can’t afford union demands. While both arguments have some merit, one fact stands out: The 10 individuals who’ve served as chief executive officers of the companies since 2010 have collected more than $1 billion of compensation. Meanwhile, wages of...
Nearly 90% of U.S. corporations with defined benefit plans look to fully transfer all their liabilities in an average of just four years, according to a new poll conducted by MetLife. In MetLife's 2023 Pension Risk Transfer Poll, the insurer said 89% of respondents said they plan to fully divest all their liabilities. Among that population, they plan to do so in an average of 4.1 years. Also, 94% of respondents said they are weighing the DB plan's value against the...
Pension scheme trustees have been urged to take the time to review their endgame options, after industry analysis revealed that UK defined benefit (DB) funding levels have continued to improve, despite ongoing volatility. Analysis from XPS Pensions found that, despite the Bank of England holding interest rates steady for the first time since late 2021, the aggregate surplus of UK DB pension schemes stood at around £169bn at the end of September. Aggregate scheme assets were also down over the month...
Alexandra Wood, Devi Shah and Andrew Block discuss the additional complexities which a PE firm will face when acquiring a distressed business with a defined benefit occupational pension scheme, in light of the protections afforded by both the UK legislative framework and the role and support of the Pensions Regulator. Mayer Brown is a global services provider comprising associated legal practices that are separate entities, including Mayer Brown LLP (Illinois, USA), Mayer Brown International LLP (England & Wales), Mayer Brown...
