Annuity Purchase interest rates hit a record-setting high in June, with the average duration 7 rate at 3.82% and average duration 15 rate at 3.87%.
Financial markets continued to roil in May, but the net impact on pension finance was modest. Both model plans1 we track were close to even on the month. Through the first five months of 2022, Plan A remains up 4%-5% while the more conservative Plan B is holding at even on the year: Assets Stocks…Read More
May marks the second straight month of Annuity Purchase interest rates hitting record levels as rates increased over 120 basis points these last two months
Stock markets tumbled in April, but sharply higher interest rates offset most or all of the impact for pension sponsors. Our two model plans1 saw mixed experience on the month, with Plan A treading water, remaining up almost 5% for the year, while the more conservative Plan B lost 1% last month and is now even through the first four months of 2022:
Annuity Purchase interest rates jump 60 basis points – the largest month-to-month increase we have ever observed.
Market volatility doesn’t deter Plan Sponsors from derisking as the PRT market remains very active.
In this article, we provide our standard analysis of de-risking: how changes in interest rates and Pension Benefit Guaranty Corporation premiums may affect sponsor decisions to de-risk (or not de-risk) defined benefit plan liabilities in 2022. For purposes of this article, we focus solely on de-risking by paying out a deferred vested participant’s benefit as a lump sum and thereby eliminating the related liability.
In 2022 defined contribution plan sponsors will have to begin providing participants with lifetime income illustrations.
August 2021 retirement policy updates and proposed legislation out of Washington DC.
Plan funding status stayed level in June, with stock markets hitting new records and Pension Risk Transfer activity remaining high.