November 2023
21Nov

IBM reopening pension plan turns industry heads

When it comes to dealing with an overfunded frozen pension plan, International Business Machines is putting into action what some of its peers are thinking about. The company recently confirmed that it will cancel its defined contribution plan company match and replace it with a component within its IBM Personal Pension Plan, a defined benefit plan, on Jan. 1. The 401(k) match is 5% of an employee’s salary. The IBM 401(k) Plus Plan had $53.2 billion in assets as of Dec....

November 21, 2023
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15Nov

US. Aon: Almost 80% of corporations expect to keep pension plans

Almost four-fifths (78%) of U.S. private-sector plan sponsors said their long-term objective is something other than pension plan termination, while the remaining 22% expect to terminate their pension plan, according to Aon's U.S. Global Pension Risk Survey, which was released Nov. 14. For plan sponsors that seek to maintain their pension plans over the long term, most intend to continue derisking the assets and/or shrink the liabilities through lump sums or partial annuity settlements. Read also U.S. public pension funding dips...

November 15, 2023
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14Nov

US Corporate Pension Funding Status Keeps Climbing

The funding status of U.S. corporate pension plans increased in October, largely due to a reduction in liabilities stemming from an increase in discount rates, which were offset by negative investment returns. According to some trackers, pension funding status is at its highest point in decades. Funding Status Increases Fueled by High Interest Rates According to WTW’s pension finance tracker, U.S. corporate pension funding is at its highest level since mid-2001, with the funding ratio of WTW’s benchmark plan increasing 1.1...

November 14, 2023
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07Nov

U.S. corporate pension plan funding ratio climbs to new high for year

The overall funding ratio at the 100 largest U.S. corporate pension plans edged up to 104.2% as of Oct. 31 – a new high for the year, according to the latest Milliman 100 Pension Funding Index released on Nov. 6. The funding ratio was 103.6% at the end of September. An investment return of -2.68% in October, the third consecutive month of losses, was offset by a significant increase in discount rates to 6.2% from 5.84%, which contributed to the gain. Assets...

November 7, 2023
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06Nov

South Africa: Potential Major Changes Affecting Occupational Retirement Plans

The South Africa government has proposed that changes to the two-pot retirement system, which gives workers access to pension funds before retirement, be delayed by a year. Employer Action Code: Act Draft legislation to amend South Africa's Income Tax Act and the Pension Funds Act would allow members of occupational retirement plans to access part of their future retirement accruals during employment, with the remainder accessible only upon retirement or death (known as the "two-pot" system). Existing payout rules would still...

November 6, 2023
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October 2023
26Oct

Inflation hits occupational pensions in Germany, says Deloitte

Inflation is having a negative impact on occupational pensions in Germany, with both the number of employers interested in, or contributing to company pension schemes declining this year compared with 2022, according to an occupational pensions study conducted by Deloitte. According to the research, 38% of the employers surveyed is “clearly” worried about losses in terms of retirement provision because of the current level of inflation, 14% consider the impact of increasing consumer prices on pensions dramatic, whereas only 14% is...

October 26, 2023
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18Oct

US. Corporate pension funded status drops

The average corporate pension funded status dipped to 104% in September from 104.4% the previous month, based on data tracked by NISA Investment Advisors for its Pension Surplus Risk index. In July, the funded status was 105.4%. NISA's PSRX, which measures the funded status volatility of U.S. corporate pension plans, rose to 6.9% in September. It was the third consecutive monthly increase. The PSRX measures a one standard deviation change in the funded status over a year. Hence, there is about...

October 18, 2023
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16Oct

US auto union strike: Carmakers say they cannot afford UAW demands

The United Auto Workers’ historic standoff with Detroit’s three carmaking giants is centered on an age-old tension: The union says corporate greed is keeping workers from earning fair wages, while Ford Motor Co., General Motors Co. and Stellantis NV say they can’t afford union demands. While both arguments have some merit, one fact stands out: The 10 individuals who’ve served as chief executive officers of the companies since 2010 have collected more than $1 billion of compensation. Meanwhile, wages of...

October 16, 2023
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10Oct

US Corporate Pension Funding Rises Slightly in September

U.S. corporate pension funding status increased in September, despite a decline in equities. September’s funding status was a return to the norm, following an August that saw pension funding decline for the first time this year.  Insight Investment found that pension funding status improved by one percentage point in August, to 107.5% from 106.5%. Equity losses were offset by a roughly 40 bps increase in discount rates, causing liabilities to decline faster than assets. Assets decreased by 4.5% in September,...

October 10, 2023
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06Oct

U.S. corporate pension funding rises in September on falling liabilities

U.S. corporate pension plan funding ratios increased in September despite a second straight month of negative market returns thanks to falling liability values, according to three new reports. Wilshire Advisors estimated the aggregate funding ratio of U.S. corporate plans increased 0.7 percentage points during the month to 105.3% as of Sept. 30. The increase was driven by the largest drop in liability values since September 2022 that resulted from the continued rise in U.S. Treasury yields, said Ned McGuire, managing director...

October 6, 2023
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