June 2013 Archive

Multiemployer plans in crisis

June 29, 2013

In this article we review the state of multiemployer plans. There have been a series of developments earlier this year calling attention to a crisis in multiemployer plan funding. Our objective in this article is to describe "what is going on with multiemployer plans" and to consider what risk it may present to sponsors. We do not regularly cover multiemployer plan issues in depth, but the state of the multiemployer plan system is so dire that it may have some effect on both budget deliberations and on how some policymakers view DB plans generally. Read More

Recent studies on rollovers identify emerging issues

June 29, 2013

Sometime later this year (it is said that the Department of Labor is targeting July, but many think that date will slip), DOL is expected to re-propose its re-definition of ‘fiduciary’ under ERISA. The original 2010 proposal was withdrawn in 2011 after a ‘storm of criticism’ by the investment industry, plan sponsors and Congress. A key target of that proposal (and likely to be a feature of any re-proposal) was advisor conflicts of interests. Read More

June 2013 Pension Finance Update

June 29, 2013

2013 has been the best first half for pension sponsors this century, hands down. Higher stock prices and higher interest rates have improved funded status by more than 10% this year for a typical sponsor. Even the stock sell-off in June was different from the ‘flight to safety’ drops seen in recent years. This time, it was the sense of an improving economy leading to Fed hints about reining in QE, that spooked investors, who expect higher interest rates if and when the Fed scales back its ‘buyer of last resort’ role. Download

May 2013 Pension Finance Update

June 04, 2013

May was another good month for pension sponsors, with higher interest rates and stock prices improving pension funded status across the board during the month. The two “model” plans we track both saw improvements in funded status last month: traditional “Plan A” was up 5% last month and is now 11% ahead year-to-date, while “Plan B” improved about 2% last month and is up 3% for the year. Download

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