Industry Updates

Retirement Update – December 2018

Retirement Update – December 2018

Key Takeaways: Discount rates were flat for the month, but still up materially since the beginning of the year. Investment returns were mostly up, however an up and down month for equities. Funded status should have remained neutral to slightly positive...

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Retirement Update – November 2018

Retirement Update – November 2018

October saw some of the worst equity market performance in recent years, although there has been some recovery into November. The negative impact on funded status due to equities would have been offset to a degree by rising interest rates throughout the month.

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Pension Plan Annuity Purchase Update – Q2 2018

Pension Plan Annuity Purchase Update – Q2 2018

Market Activity Source: LIMRA Secure Retirement Institute Through the first half of 2018, pension buy-out sales are once again on a record-breaking pace. Q2 sales eclipsed $8.2 billion which brings year to date sales to $9.6 billion. If Q3 and Q4 sales...

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Retirement Update – October 2018

Retirement Update – October 2018

There was no great place to invest during September. Fortunately for most pension plan sponsors, the decrease in plan liabilities will more than offset any losses due to poor asset returns. Plans heavily invested in large cap US stocks were best positioned to improve funded status in September, seeing a small equity return (~0.5%) combined with a 1-2% liability decrease.

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Retirement Update – September 2018

Retirement Update – September 2018

The current “bull” market, which began in March of 2009 (9.5 years ago!), is now the longest ever according to most measures, exceeding the old record of 3,453 days (from 1990 to 2000). The average bull market has lasted just over 5 years, and the average bear about 1.7 years (Source: The Economist).

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Retirement Update – August 2018

Retirement Update – August 2018

The FTSE (formerly Citi) Pension Liability Index remains close to 2 year highs. For most plans this means liabilities will have fallen relative to assets and funding will have improved over recent periods. While the market expects the Fed to raise short term interest rates further several times, this expectation is already priced in to the long term interest rates that impact pension liability valuations. Recently, markets have been moving more in response to the risks of an escalating ‘trade war’.

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Retirement Update – July 2018

Retirement Update – July 2018

Rising rates should provide continued good news for many plans, especially those which are more heavily invested in equities, since liabilities will have fallen while assets grew modestly. The FTSE (formerly Citi) Pension Liability Index is now at its highest month-end value since January 2017. This an ideal time for plan sponsors who are in the process of an annuity purchase as they are able to capitalize on the high rates.

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Retirement Update – June 2018

Retirement Update – June 2018

Flat discount rates and equity gains will result in small funded status gains for plan sponsors during May. Year-to-date plans should be ahead of where they were at the beginning of 2018 due to rising interest rates. Discount rates continue to be the driving factor in funded status changes so far in 2018.

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Retirement Update – May 2018

Retirement Update – May 2018

The rise in discount rates during the month will decrease liabilities for most plans.  This, combined with a flat US equity market across the month, will have the majority of plans seeing an improved funded percentage.

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Retirement Update – April 2018

Retirement Update – April 2018

The small drop in discount rates during the month will increase liabilities for most plans, while the generally negative equity returns will ensure that investments don’t make up for this liability increase.  Neither the discount rate movement nor the asset performance was catastrophic, but the majority of plans will likely see a drop in their funded percentage.

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