We believe we are in the Downturn phase of our FOURcast process, although we recognize the need for judgement when using this framework. Downturns are usually preceded by very high equity valuations, gradually weakening economics and poor credit conditions.
Plan Sponsors embarking on an annuity purchase face additional uncertainty and risks due to the impact of COVID-19. Transactions will continue, but awareness of market conditions and performing due diligence of insurance providers takes on additional importance.
The novel coronavirus and government reactions to it drove all aspects of markets throughout March. Equities saw some of the sharpest daily moves ever (up and down), with US markets down 14% for the month and 21% across the quarter. Long-term corporate bond yields rose for the month as historically low Treasury yields were offset by rising credit spreads due to fears of defaults in a COVID-19 economy.
We are optimistic that we are seeing the end of Phase 1, getting the virus under control. Italy and possibly Spain are getting closer to leveling off, as the strict social distancing protocols put in place in those countries looks to be having the right impact. It is early days, but we can see similar evidence in the US in Seattle, San Francisco and even New York.
On March 27th, 2020, Congress passed and the President signed the CARES Act, a massive stimulus package in response to the ongoing public health and economic crisis caused by the COVID-19 pandemic. Among the many provisions included in the bill, there are several relating to retirement plans. This article provides a quick summary of these provisions.
We find ourselves in difficult times. The global effects of COVID-19 have wreaked havoc on investment markets, on daily life and on institutional investment pools such as pension funds and endowments. Treasury yields have plummeted, credit spreads have widened, and major equity indices have fallen to levels not seen since 2016. In times like these, many investors are wondering how they can possibly find their way out…
This week saw further disruption to daily life in the US and around the world. Equity markets continued to fall, credit spreads for all types widened significantly, volatility remains high and market liquidity is very poor.
Given the events that have transpired and that continue to transpire, here are our thoughts on what it will take to start to see markets recover.
Total pension buyout sales surpassed $11.3 billion in the fourth quarter of 2019, an increase of 6% compared to the fourth quarter of 2018 and the highest quarterly total since Q4 2012. Total 2019 sales reached $28 billion, an increase of 5% from 2018 totals…
Over the month, pension plan discount rates fell even further from their already all-time lows. Equity markets were off to a positive start but, largely as a result of panic sell-offs surrounding the spread of coronavirus, took a drastic dive the final week of February…