July 2023
23Jul

COVID-19, Home Equity and Retirement Funding

By Vishaal Baulkaran & Pawan Jain  We investigate the impact of COVID-19 on using home equity to fund retirement income. We show that financial planners believe that COVID-19 positively influenced their clients’ willingness to utilize home equity products to fund retirement income in particular, sell and downsize and HELOC options. For consumers, COVID-19 does not seem to have a major impact on the outlook on residential property, retirement income, retirement plan, or perceived/actual standard of living during retirement. However, there...

July 23, 2023
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12Jul

Investment returns push U.S. corporate pension funding to 102.2% in June

U.S. corporate pension funds enjoyed greater surpluses in their funding ratios in June thanks to strong investment returns during the month, according to the latest Milliman Pension Funding index. As of June 30, the estimated funding ratio of the 100 largest U.S. corporate pension funds was 102.2%, up from 100.7% at the end of May and also marks a six-month increase from 101.9% at the end of 2022, according to the index. "While June saw strong monthly investment returns and muted...

July 12, 2023
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07Jul

U.S. corporate pension funding increases cushion in June – 3 reports

U.S. corporate pension plan funding ratios jumped further above 100% in June, driven by strong equity markets, according to three new reports. Wilshire Advisors estimated the aggregate funding ratio of U.S. corporate plans vaulted 2.3 percentage points to 103.5% as of June 30. The increase was driven primarily by increases in asset values, while liability values remained relatively unchanged. "June's funded status saw the largest monthly increase since October 2022 due to asset value increases with the performance of the FT Wilshire...

July 7, 2023
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June 2023
27Jun

U.S. public pension funding dips in May – Milliman

The overall estimated funding ratio of the 100 largest U.S. public pension plans fell to 73.7% as of May 31 from 74.8% a month earlier, according to the Milliman 100 Public Pension Funding index. During the month of May, Milliman estimated that public pension plans had an aggregate investment return of -1%, with an estimated range of -1.8% to -0.3%. "Despite the slight drop in funded status, May marks the eighth month in a row where the funded ratio has stayed...

June 27, 2023
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16Jun

U.S public pensions are building for the long-term. How pension plans are reacting after a year of shocks

By Ortec Finance U.S. public pension plans have been through a torrid year of investment volatility, rising inflation and increasing interest rates. The Federal Reserve has raised rates nine times in succession taking the rate to 5% - the highest since 2007 – while CPI inflation climbed as high as 9.1% in June 2022. The most recent figure of 4.9% for April is good news but many analysts still expect further Federal Reserve rate rises. The series of economic shocks helps explain...

June 16, 2023
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13Jun

US Pension Funded Status Continues to Improve in May

Despite negative returns for many asset classes in the stock market, decreasing liabilities resulted in U.S. corporate pension funded status improvements in May, according to analysts. Pension discount rates rose almost one-quarter of a percentage point in May, erasing much of the fall in rates that had been seen so far this year, according to Agilis’s May Pension Briefing. This boost in funded status comes on the heels of a strong April for pension plans, as an increasing number of pension...

June 13, 2023
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09Jun

A Complaint Template for Legal Challenges to the Validity of the Statutory ‘Debt Ceiling’

By Robert C. Hockett The Statutory ‘Debt Ceiling’ appearing at 31 USC 3101(b), rooted in the Second Liberty Bond Act of 1917 aimed at expanding Treasury financing options during the First World War, is not valid in any application that would occasion default on U.S. sovereign debt, other contractual obligations, or Social Security or Veterans’ pension obligations. There are at least seven mutually reinforcing legal grounds for so saying. These include preemption of such application of the Ceiling by the...

June 9, 2023
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06Jun

Funding ratios for U.S. corporate pension plans increase in May

U.S. corporate pension plans saw their funding ratios increase in May thanks to falling liability values offsetting asset losses due to negative non-U.S. equity returns during the month, according to three new reports. Wilshire Advisors estimated the aggregate funding ratio of U.S. corporate plans increased 0.8% percentage points to land at 99.8% as of May 31. Liability values declined further than asset values after U.S. Treasury yields rose, primarily due to debt ceiling negotiations and continuing anticipation regarding the Federal Reserve,...

June 6, 2023
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May 2023
31May

UK. Derisking well funded DB schemes may be an opportunity missed

Funding is reaching record levels and DB schemes are now in a position of strength. Current regulations compel schemes to target ultra low investment returns, but taking risk and therefore return out of DB pension investments may be going too far, representing a ‘missed opportunity’ to better invest £1.5 trillion of UK DB pension scheme assets. Steve Hodder, partner at LCP, said: “For 20-plus years, regulatory focus has been on ‘slowing down’ DB schemes through reducing investment risk. This was...

May 31, 2023
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26May

Pension Reform: Conceptual Foundations and Practical Challenges

By Seamus Duffy & Oliver Giesecke Underfunded pension are the largest liability for state and local governments across the United States. As a result of increasing recognition of the associated risks, recent statutory funding mandates led to a sharp increases in required contributions, threatening city services and employee bases. As funding pressure mounts, pension reforms offer a viable tool for prudent economic policy. We propose five general principles that guide pension reform considerations and discuss how these principle stand in...

May 26, 2023
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