October 2024
07Oct

UK. Royal Mail launches collective defined contribution pension plan

Royal Mail has launched a collective defined contribution (CDC) pension plan to provide its more than 100,000 employees with a cash lump sum and an income in retirement. Along with the Communications Workers Union (CWU) and Unite CMA, the employer designed and implemented a pension arrangement for its workforce that was affordable for itself and its employees. Every employee with at least one year of service is eligible to join, with the majority joining automatically. The plan pools members’ contributions and provides staff...

October 7, 2024
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August 2024
22Aug

US. Reduction in Pension Benefits Leads to Wider Income Inequality, Study Finds

The continuing decline of the number of defined benefit pension participants in the U.S. is widening America’s income equality gap, which in turn is stunting economic growth, according to a recent study from the National Conference on Public Employee Retirement Systems. The study also found that public policies aimed at cutting public costs by reducing pension benefits or switching to defined contribution plans may actually increase the need for public spending due to “the dynamic interrelationship between pension reforms, income inequality, the...

August 22, 2024
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June 2024
17Jun

​Sweden eases rules on occupational pension payout phase, allowing pauses

Sweden’s government has decided to introduce more flexible rules for the payment of occupational pensions — following agreement on the issue by the cross-party pensions group last October. During the first five payment years, it will be possible for individuals to pause payments and extend the payment period, according to an announcement from the ministries of finance and social affairs last week. Elisabeth Svantesson, the Swedish finance minister, said: “Sweden’s pensioners should be able to choose how they want to set...

June 17, 2024
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14Jun

3M to transfer pension-payment obligations for 23,000 U.S. retirees

3M to book a charge of nearly $1 billion as it transfers some of its pension obligations to Met Tower Life 3M Co. said Thursday it will transfer about $2.5 billion of its pension-payment obligations to Metropolitan Tower Life Insurance Co. The consumer- and industrial-products company (MMM) said the transfer, which will affect the pension payments of about 23,000 U.S. retirees, won't change the amount of the monthly benefit payments. The only change is who is making the payments. 3M, which makes...

June 14, 2024
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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
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May 2024
17May

The Incidence of Workplace Pensions: Evidence from the Uk’s Automatic Enrollment Mandate

By Rachel Scarfe, Daniel Schaefer & Tomasz Sulka We examine who bears the costs of mandated workplace pension programs, exploiting the quasi-experimental rollout of automatic enrollment in the UK. Total compensation (take-home pay plus employer contributions) increases, driven by employer contributions, while the amount of take-home pay decreases. These effects differ by employer size, with take-home pay declining to an extent in the largest firms that we can rule out a pass-through to employees of more than 47%, significantly less...

May 17, 2024
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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
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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
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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
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April 2024
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
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