July 2021
14Jul

He runs the worst-funded public pension in the country. Here’s his ‘good news’ story

It’s a safe bet that many people, seeing their work described in print as “among the worst in the country,” might cringe and try to avoid the media. But David Eager has spent the past five years running the Kentucky Public Pension Authority, with an eye to turning the system around. A big part of his work has been increasing transparency and educating people about the nitty-gritty of public pensions, how Kentucky got into the mess it’s in, and how...

July 14, 2021
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02Jul

Pension Funding Index June 2021

By Zorast Wadia and Charles J. Clark The Milliman 100 PFI funded ratio increases to 98.8% as investment gains counter the effects of discount rate decreases The funded status of the 100 largest corporate defined benefit pension plans increased by $8 billion during May as measured by the Milliman 100 Pension Funding Index (PFI). As of May 31, the deficit improved to $21 billion from $29 billion at the end of April due to strong investment performance. The funded status improvement...

July 2, 2021
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June 2021
24Jun

These public pension systems used to have too much money. Now they’re in crisis. What happened?

In 2001, some of the country’s biggest public pension systems were flush. The plan serving Kentucky state workers, for example, was 125.8% funded, meaning it had 25.8% more money on hand to pay all of what it owed current retirees and workers expected to retire for the next 30 years. But not even two decades later, Kentucky’s pensions, and some other previously over-funded plans, were in crisis. What happened? In Kentucky, lawmakers approved extra benefits for plan participants — even making them...

June 24, 2021
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16Jun

US. Pension Worries Ease for States, Localities on Stimulus, Stocks

Public pensions performed better than anticipated during the pandemic, easing the financial strain on state and local governments sponsoring the plans, thanks in part to U.S. aid and stock market gains. The massive federal stimulus has helped head off the dire revenue picture that many governments were facing early in the pandemic. At the same time, record stock market gains and past changes to public pension operations helped drive funded levels higher and push pension management down the list of...

June 16, 2021
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09Jun

US. Pensions Are Almost Fully Funded and Coming for Your Bonds

A “massive rotation” into corporate bonds from equities may be on the horizon for U.S. pension funds as they become fully funded, according to strategists at Bank of America Corp. Investment gains boosted the funded ratio of the 100 largest corporate plans to 98.8% in May, according to Milliman. That measure of defined benefit pension assets to liabilities has surged from 82% since July 2020, data from the risk management firm show. If interest rates continue to rise, BofA expects the...

June 9, 2021
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04Jun

Central Falls’ Bankruptcy and the Principle of Shared Pain

By James Tatum The small city of Central Falls, Rhode Island filed for Chapter 9 bankruptcy in 2011, with five other cities. The case could have easily been overshadowed by the insolvency of other sizable jurisdictions. Instead, Central Falls’ case is particular in both the treatment of bondholders and pensioners – one class of creditors was completely protected, while the other suffered deep cuts. The purpose of this article is to examine the method used to distribute losses in Central...

June 4, 2021
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May 2021
24May

UK. Top British companies forced to pump £200bn into pension schemes to prop them up, figures reveal

Top British companies have been forced to pump £200billion into their pension schemes to avoid a drop in funding, figures reveal. Read also UK pension asset owners join Net-Zero Asset Owner Alliance Law firm Lane Clark & Peacock said the sum – equivalent to the economic output of Czechia – was needed to counter tumbling share prices and bond yields. Read also UK. One in five savers have three or more pensions It warned that firms were 'running just to stand still' and that...

May 24, 2021
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17May

Jamaica. Senator proposes to scrap NIS contributory system

Opposition Senator Damion Crawford has proposed that a portion of the general consumption tax (GCT) collected by the Government be used to pay pensions. In his proposal to scrap the current National Insurance Scheme (NIS) contributory system, Crawford pointed out that many Jamaicans are reluctant to pay over funds to the NIS, and only about 20 per cent subscribe to any pension scheme. Many, he said, are left destitute when they reach retirement. Employees and self-employed persons are required to be insured...

May 17, 2021
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06May

S&P 1500 Pension Funded Status Increased by 1 Percent in April

By Mercer The estimated aggregate funding level of pension plans sponsored by S&P 1500 companies increased by 1 percent in April 2021 to 96 percent as a result of an increase in equity markets, slightly offset by the decrease in discount rates. As of April 30, 2021, the estimated aggregate deficit of $102 billion USD decreased by $16 billion USD as compared to $118 billion USD measured at the end of March according to Mercer,[1] a global consulting leader and...

May 6, 2021
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06May

U.S. corporate pension funding inches up in April – 3 reports

Funding ratios for U.S. corporate pension plans increased in April, according to reports from Wilshire Associates, Legal & General Investment Management America and Mercer. All three firms noted strong equity markets as the primary driver for the increases, partially offset by a decrease in discount rates leading to rising liability values. Wilshire's monthly report said U.S. corporate pension plans' aggregate funding ratio rose 0.6 percentage points to 92.9% in the month ended April 30. The change was the result of a...

May 6, 2021
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