January 2022
04Jan

Financial health of largest U.S. corporate pension plans surges to highest level since financial crisis

The financial health of the nation’s largest corporate defined benefit pension plans improved significantly in 2021 as strong investment returns and rising interest rates help to drive their aggregate funded status to its best level since before the 2008 financial crisis, according to an analysis by Willis Towers Watson (NASDAQ: WLTW), a leading global advisory, broking and solutions company. Read also US. Pandemic’s impact on retirement savings varies by geography, gender and age Willis Towers Watson examined pension plan data for...

January 4, 2022
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December 2021
17Dec

Spending in the Shadow: The Impact of Unfunded Pensions on Public Services and Public Employees

By Manita Rao The shadow of unfunded public pensions has raised concerns on its consequences for public services and public employees. Some argue that pension liabilities increase the cost of government by crowding out public services. Others suggest that unfunded pensions are more likely to affect public employees and have limited implications for public services. This article empirically examines the extent to which the impact of unfunded pensions is mitigated or has spillover effects on public services and public employees....

December 17, 2021
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03Dec

U.S. corporate plans’ funded status slips in November

Funding ratios for U.S. corporate pension plans decreased in November, according to reports from Legal & General Investment Management America, Insight Investment and Northern Trust Asset Management. Read also US. SEC guidance opens the door for more ESG proxy proposal LGIMA's monthly pension solutions monitor showed that the funding ratio of a typical corporate pension plan decreased by roughly 1.6 percentage points to 90.1% in November, primarily because of poor equity performance and lower Treasury yields. Read also US. Most Kentucky pension...

December 3, 2021
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02Dec

US. Most Kentucky pension plans face billions in debts, but not the one for legislators

Despite many billions in public pension debts, Kentucky has a state pension fund that is literally overflowing with cash — the one reserved for legislators. Last week, lawmakers in Frankfort were briefed on the Fiscal Year 2021 performance of their Legislators Retirement Plan, which provides them with state-subsidized pensions and health insurance. Their $79 million pension plan has a funding level of 108.9 percent, which is up from 106.3 percent in 2020. Their retiree health insurance plan is 362 percent funded. By...

December 2, 2021
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November 2021
08Nov

US. Newly Flush With Cash, Retirement Funds Struggle to Find Appealing Investments

State and local pension funds are reaping a historic windfall thanks to billions of dollars in record market gains and surplus tax revenues. Now they need to decide what to do with the money. It is a bittersweet dilemma that the chronically underfunded retirement systems share with many household and institutional investors around the country. Just when they finally have cash to play around with, every investment opportunity seems perilous. Read more @WSJ 682 views

November 8, 2021
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05Nov

The Economic Burden of Pension Shortfalls: Evidence from House Prices

By Darren Aiello, Asaf Bernstein, Mahyar Kargar, Ryan Lewis & Michael Schwert U.S. state pensions are underfunded by trillions of dollars, but their economic burden is unclear. In a model of inefficient taxation, real estate fully reflects the cost of pension shortfalls when it is the only form of immobile capital. We study the effect of pension shortfalls on real estate values at state borders, where labor and physical capital could more easily relocate to a state with a smaller...

November 5, 2021
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03Nov

U.S. corporate pension funding rises in october-4 reports

Funding ratios for U.S. corporate pension plans increased in October, according to reports from Legal & General Investment Management America, Wilshire, Northern Trust Asset Management and Insight Investment. LGIMA found in its monthly pension solutions monitor that the funding ratio of a typical corporate pension plan increased by 2 percentage points to 91.7% in October primarily due to strong performance from global equities. LGIMA estimated that U.S. Treasury rates dropped 4 basis points while credit spreads remained relatively unchanged, resulting in...

November 3, 2021
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October 2021
20Oct

Avoiding a pensions disaster at UK universities

After two years of pandemic-induced disruption, students at UK universities were hoping this term that things were slowly returning to normal. But life may soon get much worse again and this time it has nothing to do with Covid-19. Ballots on strike action by lecturers have been called at UK universities. The issue is pensions; more precisely, whether the Universities Superannuation Scheme (USS) — the largest pension scheme in the UK with 470,000 members and £85bn in assets — has sufficient...

October 20, 2021
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12Oct

US. Milliman analysis: Corporate pension funded ratio holds steady at 97.3% in September

Milliman, Inc., a premier global consulting and actuarial firm, today released the results of its latest Milliman 100 Pension Funding Index (PFI), which analyzes the 100 largest U.S. corporate pension plans. A rise in discount rates during September countered a 1.68% investment loss for corporate pensions, leaving the funded status of the Milliman 100 PFI nearly flat for the month. The market value of assets declined by $38 billion while the monthly discount rate climbed from 2.65% in August to...

October 12, 2021
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September 2021
24Sep

US. Stock Market Helps State Pension Debt Hit 10-Year Low, But Crisis Still Looms Large

Thanks to historic investment returns over the last year, state public pension plans are in their best shape since the Great Recession. After state pension debt grew to more than $1.4 trillion last year, two new reports estimate that gap between the total amount states have promised to retirees and what they’ve actually set aside in their pension investment funds will shrink dramatically. A recent analysis by the Pew Charitable Trusts says the gap could dip below $1 trillion this...

September 24, 2021
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