January 2024
12Jan

US. Pension Plans in ’23: Glass Half Full—and Half Empty

“Best condition this century.” Or, “improved” but “fragile.” Both characterizations of the state of pensions in 2023. Which applies depends on which pension system one is talking about. Better, But… State and local pension plans saw improvement in 2023, but there is still plenty of room for more, according to Anthony Randazzo and Jonathan Moody in Equable’s research brief “The State of Pensions 2023,” which looks at how public pensions fared in the year that was. Randazzo and Moody write that the...

January 12, 2024
News, ,
Read more...
03Jan

US. Largest U.S. corporate pension plans’ funding ratio hits 100% – WTW

The largest U.S. corporate pension plans' aggregate funding ratio reached 100% at the end of 2023, according to a new estimate from Willis Towers Watson. The analysis of pension plan data of 358 Fortune 1000 companies with defined benefit plans estimates the ratio increased from 98% at the end of 2022. WTW's estimated pension plan assets totaled $1.19 trillion as of Dec. 31, a decline of 1% from the previous year due to an active year in pension risk transfer transactions...

January 3, 2024
News, ,
Read more...

December 2023
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
News, ,
Read more...
08Dec

Global Public Pensions 2023

By Official Monetary and Financial Institutions Forum The Global Public Pensions 2023 report explores how public pension and sovereign funds are building optimal investment strategies to address the uncertain economic environment and factor sustainability into their portfolios. The report draws on surveys, discussions, and written contributions from 22 global public funds across the world with combined assets under management of $4.3tn. These include the likes of Singapore’s GIC, Canada’s CDPQ, Australia’s Future Fund and India’s National Infrastructure Investment Fund. It...

December 8, 2023
Books, Books, Reports, System Characterization, , , ,
Read more...
08Dec

How Higher Interest Rates Are Changing Focus of Fully Funded Pension Funds

Fully funded due to higher discount rates and investment performance, many corporate defined benefit pension funds are shifting their investment goals to maintaining that funding progress, from their prior focus of maximizing investment returns. While many have had significant assets dedicated to liability-driven investing in recent years, they are finding it is time to acknowledge the higher-yield, better-funding environment. As a result, a common approach among the cohort is to examine “overlap in plan holdings, inadequate hedging of liabilities and...

December 8, 2023
News,
Read more...
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
News, ,
Read more...
06Dec

U.S. corporate funding ratios rise in November – 3 reports

U.S. corporate pension funds saw funding ratios rise slightly in November, thanks to very strong market returns offsetting a significant rise in liability values, three new reports say. Wilshire Advisors estimated the aggregate funding ratio of U.S. corporate plans reached 105.4% as of Nov. 30, up from 105.1% a month earlier. The change was driven by a 7.8 percentage-point increase in asset values offsetting a 7.4 percentage-point increase in liability values. The two increases rounded to a funding hike of 0.3...

December 6, 2023
News, ,
Read more...
01Dec

2023 Prudent Pension Funding Report: A story of positive trends and persistent outliers

By Michael Hall  In the wake of last year’s market turbulence, are most corporate pension plans still on a pathway to achieving full funding? Yes, according to our latest research. Our 2023 Prudent Pension Funding Report reveals most (97%) corporate pension plans can achieve full funding without a significant draw on corporate cash, based on the respective firms’ latest disclosures as well as market and interest rate movement so far in 2023. This finding increased from 86% in last year’s report. Despite...

December 1, 2023
Books, Books, Pension Management, Reports, , ,
Read more...
01Dec

Augmenting the Funded Ratio: New Metrics for Liability Based Plans

By Sanjiv Ranjan Das, Daniel N Ostrov, Anand Radhakrishnan, Deep Srivastav & Wylie Tollette The primary metric used to determine the health of a liability based plan (LBP) is the funded ratio, which is the ratio of the LBP’s current assets to its present-valued liabilities. The funded ratio, however, cannot accommodate a considerable number of important financial factors, so we suggest three additional metrics of financial health, each connected to the probability of fulfilling the plan’s liabilities. The first two...

December 1, 2023
Articles, Pension Management, , ,
Read more...

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
News, , ,
Read more...