Integrated Actuarial and Investment Solutions
River and Mercantile Solutions is a leading institutional investment and actuarial advisor and fiduciary manager. We are dedicated to providing our clients with the understanding and tools to successfully meet the investment goals of their institution. River and Mercantile Solutions is a division of River and Mercantile Group PLC, which is publicly traded on the London Stock Exchange (Ticker: RIV).
The Pension Benefit Guaranty Corporation (PBGC) has announced the2020 Plan Year premium rates. This announcement reminds plan sponsors that providing the same pension benefits continues to be more and more expensive, especially if they maintain underfunded liabilities. Luckily, sponsors can implement a number of Simply Smarter SolutionsTM to mitigate this increased cost burden.
Interest rates can move pension funded status up or down significantly. An interest rate collar can protect funded status against a decline in rates, while rate increases can still improve funded status.
Long term interest rates saw some of the steepest rises in recent memory in early September, with the 10 year US Treasury yield rising ~30bps in a few days. This increase was not fully sustained for the rest of the month but discount rates did remain higher compared to their multi-year lows achieved in August.