June 2024
12Jun

Funded Status of U.S. Corporate Pension Plans Continues to Improve in May

In May, the financial health of U.S. corporate pension plans experienced a marked improvement, continuing a positive trend seen over the past five months, according to a round-up of the country’s pension watchers. The main reasons for the positive funding trends in May across various corporate defined benefit plans included positive economic indicators, strategic investment approaches such as cash-flow-driven strategies and resilience in market performance despite lower interest rates. “May’s improvement is the fifth month in a row of funded ratio...

June 12, 2024
News, ,
Read more...
10Jun

US. Ways to leverage a pension plan surplus

A robust equity market coupled with the strong fixed-income returns that followed the sharp rise in interest rates have restored corporate pension plans to full-funded status, with many enjoying a surplus. This welcome development has sparked conversations by plan sponsors exploring paths for their excess pension assets, from bolstering retirement benefits to addressing corporate financial needs or supporting other business initiatives. “The pension environment has changed significantly since pensions were last overfunded, and these changes present opportunities to plan sponsors...

June 10, 2024
News, ,
Read more...
07Jun

US. New Issue Brief: Time to Fix Underfunding of Public-Sector Pensions

Public-sector pensions are facing a significant underfunding crisis that has only worsened over the past 25 years despite periods of high-asset returns. This growing burden threatens the financial stability of municipal and state finances, potentially leading to higher taxes or severe cuts to retirees’ benefits and essential services if not addressed promptly. In a new Manhattan Institute issue brief, senior fellow Allison Schrager argues the current high-interest rate environment presents a unique opportunity to set public-sector pensions on a more sustainable path. Improper pension...

June 7, 2024
News, , ,
Read more...
05Jun

US. Now It Is About Protecting Healthy Funded Levels

Corporate defined benefit pension plan sponsors have a singular opportunity to evaluate if their plans are in a position to offload liabilities using pension risk transfer or allocate to strategies with less risk, including liability-driven investing, reviewing their options to best provide pension benefits to the participants to whom they were promised at the lowest cost for the company going forward. Separate Milliman and Principal Asset Management research on pension plan funding finds sponsors have room to now accelerate de-risking—as...

June 5, 2024
News, , ,
Read more...

May 2024
15May

US Corporate Pension Funding Mixed on Stock Declines

Changes to the average funded status of the largest U.S. corporate defined benefit plans were mixed in April as lower stock returns weighed on the positive effect of higher interest rates, according to monthly pension trackers from some of the country’s largest pension consultancies. The mixed results come off all-time highs booked in March. Meanwhile, pension fund investors are on interest rate watch, with the Federal Reserve still expected to cut rates later this year depending on how inflation, employment and...

May 15, 2024
News, ,
Read more...
15May

UK. Pension Protection Fund 7800 index shows April increase for surplus, funding ratio

The total surplus of U.K. corporate pension funds covered by the Pension Protection Fund 7800 index increased 0.6% to £458.3 billion ($570.5 billion) at the end of April, coupled with an increase in funding ratio. The funding ratio was 148.8% at the end of April, compared to 146.5% at the end of March this year. Of the 5,050 plans in the PPF 7800 Index, there were 505 plans in deficit and 4,545 in surplus. Shalin Bhagwan, chief actuary at the Pension...

May 15, 2024
News, ,
Read more...
09May

US. Corporate pension funding surpluses remain high in April – 3 reports

U.S. corporate pension fund surpluses remained high in April despite negative market returns for the month, according to three new reports. Wilshire Advisors estimated the aggregate funding ratio of U.S. corporate plans reached 110.8% as of April 30, an increase of 1.1 percentage points above the 109.7% funding ratio estimated as of March 31. "April’s funded status increase resulted from the increase in Treasury yields, which led to the largest monthly decline in liability values since September 2022. Corporate bond yields,...

May 9, 2024
News, ,
Read more...

April 2024
30Apr

Dutch pension sector’s funding ratio improves

In the first quarter of 2024, Dutch pension funds saw their funding ratios improve relative to the previous quarter, as the increase in their liabilities was lower than the growth in their investments. Total investments increased by €35 billion to €1,599 billion, while aggregate liabilities increased by €5 billion to €1,370 billion. The funding ratio reflects a pension fund’s current financial position, expressing the ratio between investments and liabilities. The average funding ratio stands at 116.7% The Dutch pension sector’s average...

April 30, 2024
News,
Read more...
26Apr

2024 Corporate Pension Funding Study

By Zorast Wadia & Alan Perry The 2024 edition of the Milliman Corporate Pension Funding Study (PFS) is our 24th annual analysis of the financial disclosures of the 100 U.S. public companies sponsoring the largest defined benefit (DB) pension plans. These 100 companies are ranked highest to lowest by the value of their pension assets as of the end of fiscal year (FY) 2023. These values have been reported to the public, to shareholders, and to the U.S. federal agencies...

April 26, 2024
Books, Books, Pension Management, Reports, , ,
Read more...
26Apr

Nearly Half of the Largest US Pension Funds are More Than 100% Funded, Milliman Reports

Milliman, which tracks the status of the largest 100 corporate defined benefit plans in the U.S., reported that corporate pension funding is near its all-time highs in the recent results of its 2024 corporate pension funding study. Among Milliman’s findings, the funded status of these plans declined slightly from 99.4% to 98.5%, due to a slight decline in plan discount rates. The funded deficit of these plans increased from $8.5 billion to $19.9 billion in 2023. However, this is far from...

April 26, 2024
News,
Read more...