May 2023
09May

US. Corporate contributions could be a thing of the past

U.S. corporations are continuing to lower their expected contributions to their pension plans in 2023 as more and more plans reach full funded status. The companies behind the 100 largest corporate pension funds plan to contribute a total of up to $12.5 billion in 2023, according to Pensions & Investments' analysis, compared to $16.2 billion contributed in 2022. The data reflect the companies' expected contributions disclosed in their 10-K filings with the Securities and Exchange Commission. For S&P 500 companies overall, 28...

May 9, 2023
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April 2023
21Apr

Shocks to Occupational Pensions and Household Savings

By Francesco Caloia, Mauro Mastrogiacomo & Irene Simonetti This paper studies the saving response of households to shocks in the capital position of their pension fund. Using survey panel data matched to supervisory data of Dutch occupational pension funds for a period that involved three major economic crises, we provide evidence of an increase in savings driven by a worsening of the financial position of pension funds. The identification strategy exploits cross-sectional and time variations in the funding ratios of...

April 21, 2023
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March 2023
17Mar

Swiss parliament backs pension overhaul but critics seek referendum

Parliament has approved an overhaul of the occupational pension scheme - a key element of Switzerland's social security system. However, voters are likely to have the final say on the issue as political parties on the left, possibly backed by the main farmer's organisation, have announced they will challenge the reform via a referendum. The legal amendment approved by parliament is intended to secure the level of the occupational pension, strengthen financing and improve the protection of part-time employees, notably women. At...

March 17, 2023
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10Mar

US. Could companies be persuaded to bring back pensions?

There’s a certain type of employer-sponsored retirement plan that’s the stuff of legends. They’re called traditional defined benefit pension plans, meaning employees get a fixed amount of money upon retirement, usually shouldered by the company. While they’ve since been replaced in 401(k) plans in almost every company, there’s an argument to be made that today’s tight labor market could offer companies that bring back pensions an edge in attracting talent. Marketplace senior economics contributor Chris Farrell recently spoke with Marketplace’s...

March 10, 2023
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07Mar

U.S. corporate pension funding increases in February – 3 reports

U.S. corporate pension plans' funding ratios increased in February as falling liability values offset a drop in assets, according to three new monthly reports. Legal & General Investment Management America estimated the average funding ratio of the typical U.S. corporate pension plan was 99.9% as of Feb. 28, up from 99.8% a month earlier. In its latest monthly Pension Solutions Monitor, LGIMA said the estimated average funding ratio rose slightly in February because the increase in discount rates, which caused liability...

March 7, 2023
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01Mar

U.S. pension plan buyouts reach record volume in 2022

U.S. corporate pension plan buyout sales totaled a new all-time high of $48.3 billion in 2022, a LIMRA survey found. The new all-time high for U.S. pension buyout sales topples the previous record of $36 billion set in 2012 and is up 42% from the 2021 volume total of $34.2 billion. The total number of buyout contracts also hit an all-time high, reaching 562 for all of 2022, which well exceeded the previous record of 500 contracts set in 2019. "Rising interest...

March 1, 2023
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February 2023
28Feb

Milliman analysis: Competitive pension risk transfer buyout rate drops 90 basis points to 99.3% during January

Milliman, Inc., a premier global consulting and actuarial firm, today announced the latest results of its Milliman Pension Buyout Index (MPBI). As the pension risk transfer (PRT) market continues to grow, it has become increasingly important to monitor the annuity market for plan sponsors that are considering transferring retiree pension obligations to an insurer. During January, the estimated cost to transfer retiree pension risk to an insurer in a competitive bidding process decreased from 100.2% of a plan's total liabilities...

February 28, 2023
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23Feb

Willis Towers Watson dives into U.S. market for pooled employer plans

After launching pooled employer plans in the U.K. and Europe, Willis Towers Watson is hitting the U.S. market with its own PEP offering. In a news release Thursday, the British-American multinational company announced that it had launched LifeSight PEP, a pooled employer plan for the U.S. market that it says "simplifies 401(k) plan sponsorship for employers and improves outcomes for their employees." The pooled employer plan will use Transamerica as its record keeper. The company will pursue employers with anywhere from a...

February 23, 2023
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22Feb

Higher Pension Costs, Earnings Hits Loom as Interest Rates Rise

Telecommunications giant AT&T Inc. cautioned investors this quarter about a rising corporate cost would ding its full-year earnings guidance. The culprit was pensions, and in particular, higher interest rates affecting its calculation to tally pension costs.   The company said it expected adjusted earnings per share in the range of $2.35 to $2.45—a range that trailed analyst estimates—because of nearly 20 cents per share of “headwinds associated with non-cash pension costs,” Chief Financial Officer Paschal Desroches said on the company’s fourth...

February 22, 2023
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