Monthly Retirement Update

Retirement Update – December 2019

Dec 6, 2019 | Defined Benefit, Industry Updates, Investment

Key Takeaways:

  • Discount rates were little changed over the past month – again
  • Equity returns continued to be strong, especially US equity
  • Funding levels over the last two months have continued to improve as assets outpaced liabilities

November 2019 Summary

Long-term corporate bond yields stayed relatively flat for the month and have remained relatively flat since September. During November, increased confidence in a China/US trade agreement pushed US stock prices higher. With liability discount rates remaining level and an increase in US equity markets, most plans should have seen a slight increase in funded status for the second month in a row.

Discount Rates & Asset Returns

Discount rates remained relatively flat in November, only decreasing 0.004%. However, current rates are still down over 1% since year end 2018 and are 1.3% lower than rates from this time last year. The FTSE pension discount index finished November at 3.13%.

Developed market equities increased this month on the hopes of a US & China trade deal. US equities showed the strongest returns supported by strong economic data. Global central banks made no changes. Interest rates ended the month marginally higher and global bonds were generally flat.

What’s New at R&M?

R&M Managing Director featured in PLANSPONSOR

Managing Director, Michael Clark, wrote a piece for PLANSPONSOR on what DB plan sponsors should do to fulfill their fiduciary responsibilities when implementing a pension risk transfer. Read More



New Mortality Tables Released!

The Society of Actuaries (SOA) published new mortality tables last month and our own Joe Anzalone and Lauren Meyer break down what this means for plan sponsors. Read More

Ask R&M!

Q: Given concerns on the potential volatility of US markets in the upcoming year, what are some strategies to consider to protect our funded status?

A: There are a number of ideas to consider and the optimal one will depend on each plan’s unique situation.  However, in addition to diversification, derivative based strategies can be customized to fit a plan sponsor’s risk appetite.  Both equity based and interest rate based derivative strategies can be designed to meet timeline, cost and risk needs and used in connection with current investment strategies.  These strategies will allow for continued market exposure but at reduced risk levels and can be implemented relatively quickly at zero premium.


Have a question for R&M? Please submit it to and look for a possible answer in next month’s update!

SECURITY INDICES: This presentation includes data related to the performance of various securities indices.  The performance of securities indices is not subject to fees and expenses associated.  Investments cannot be made directly in the indices.   The information provided herein has been obtained from sources which River and Mercantile LLC believes to be reasonably reliable but cannot guarantee its accuracy or completeness.

CONFIDENTIAL:  For addressee use only, not to be disclosed to any other person without express consent from River and Mercantile LLC.  Past performance cannot be relied upon to predict future results.  River and Mercantile LLC is an investment advisor registered with the US Securities and Exchange Commission.


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