Pension Pulse is a quarterly newsletter devoted to tracking the fortunes of our nation’s corporate defined benefit pension plans. In each issue, we apply our proprietary methodologies to give you an up-to-the-minute snapshot of aggregate plan funded status and examine topics vital to DB plan sponsors.
The beginning of the end and the start of a trend? After nine years without a Fed rate hike, the beginning of the end of the era of rock-bottom rates looks ever more likely. It will have large implications for pension funded status.
Pension accounting as an element of corporate strategy: A plan’s results can affect its sponsor’s financials in three ways: on the balance sheet, in the income statement and through cash flow. Changes in funded status, by any measure, can influence corporate financial and ultimately corporate business strategy.
Meeting the challenge of growth in a liability-oriented portfolio: Even the most liability-aware pension investment strategies have to allow for inevitable contingencies by maintaining an allocation to growth-seeking assets.
Waiting for rates to rise, funded status takes a slight downturn: After 2013's monumental gains, Corporate America's pensions have eased up on the throttle this year.
Aligning DB plan strategy with the new mortality tables: Revised mortality tables are coming soon. Here are some steps pensions can take to get ready.
Continuing trend pension smoothing: Congress extends funding relief, turning corporate DB plans into unconventional revenue sources. We take a closer look at the implications for sponsor contributions.
Blending the two effects: increasing longevity and pension relief
Longevity increase + pension relief: What does it add up to? We assess the net impact of the year's good news/bad news stories on funded status.
Landmark pension research (second in a series): In this edition, we investigate Fischer Black's 1980 pension tax arbitrage model.
Funded status outlook from global markets strategist Michael Hood
Where to next for funded status: After a January wobble, “Corporate America's” 2014 funded status remains volatile.
Overfunded vs. underfunded: Asset allocation is not the differentiator: Today’s “winners” really haven't done things differently from others since the 2008 crisis. Research shows that the winners had a head start and lower barriers to overcome.
Overfunded vs. underfunded: Who has more in fixed income: Funded status so far has not been the only factor in a derisking decision—the size of the plan relative to its sponsor is more important.
Creative ways of getting to fully funded: the example of AT&T: AT&T’s novel plan contribution up close.
The PBGC premiums increase: one more straw on the camel's back: The hefty hike hurts, but the decision to close the funding deficit right away is not straightforward.
Overfunded? Take advantage of increased illiquidity capacity: Even fully funded plans need a growth portfolio, and a strong hedge portfolio may allow for a large allocation to illiquid assets.
Landmark pension research (the first of a series): In this series debut, we summarize and comment on the findings of landmark research by Robert Merton, Zvi Bodie and Li Jin in their article "Do a Firm’s Equity Returns Reflect the Risk of Its Pension Plan?"
Funded status outlook from Global Markets Strategist Michael Hood